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New home construction should remain robust over at least the next one to two years. Affordability remains favourable relative to history.
Existing home supply remains extremely tight, at roughly half of prior trough levels. This cycle’s demographics are more favourable than the last (18% more people on average are turning 30 over the next five years than did during the 1998-2005 period).
Repair/remodel demand should moderate in 2H21, especially DIY. Pending home sales (a two-to-three-month forward indicator of existing home sales) have moderated sharply since the end of 2020 and suggest a decline in existing home sales starting later this summer.