The residential construction sector has been largely stagnant over recent years. However, recent technical signals, both in relative and absolute terms, point to the potential start of a new growth phase. Notably, price action on charts is beginning to align with improving fundamental data, which may reinforce this view.
Government figures showed that housing starts increased by 6.2% in December, exceeding expectations and reaching a five-month high. Despite this improvement, developers continue to face structural challenges. These include supply imbalances following a period of overexpansion when mortgage rates began to rise. As a result, companies are attempting to balance sales incentives with the need to preserve margins.
Analysis as of 20 February 2026.
Despite a rebound at the start of the year, the iShares US Home Construction exchange-traded fund (ETF) finished January at broadly the same level as two years earlier. Since then, the ETF has risen sufficiently to break through several key resistance levels, suggesting that near-term momentum has shifted in favour of buyers.
