Housing rebound

The U.S. housing market continues to rebound along with the broad U.S. economy. Housing, which is typically a leading indicator of recessions and bear markets, was not effective this time in predicting the March 2020 recession and stock market crash. But that's mainly due to the unprecedented nature of the pandemic, illustrating a rare problem with historical analysis - sometimes, something very different comes along. Sometimes, "this time is different" (but very rarely). Traders who thought in February that coronavirus was "just another Ebola scare" were proven dead-wrong.

New Home Sales has surged to highest level since the financial crisis, further demonstrating the kind of K-shaped recovery we're seeing right now:

There's only 1 other historical case when New Home Sales surged more than 60% over a 4 month period: August 1980. That historical case also occurred after a very brief and sharp bear market, which was later followed by a second recession 1 year later:

Similarly, Housing Starts has surged more than 40% over the past 4 months:

And since both historical cases occurred after a recession, the S&P usually rallied over the next 6 months:

Building Permits are up more than 30% over the past 4 months:

Once again, all the historical cases (with the exception of January 1990) occurred after a recession, which is why the S&P 500's returns over the next 6 months were uniformly bullish: