Kiesel: Housing Sector Looks Sturdy
Thanks to strong growth in the sector, housing debt looks to be among the more attractive enclaves in today's bond market, says PIMCO's Mark Kiesel.
Sumit Desai: You mentioned you're still bullish on housing. What is the best way to play that growth, and how is that translating into your portfolio holdings?
Mark Kiesel: So, this is one of the most exciting things still available in the market today. You and I have talked about this for three years and, every time we talk, you keep seeing me more and more excited. And the reason is that it's growing two times faster than the overall economy. The overall economy is growing 4% to 5%. Housing is growing at 10%. Housing, I think, will still grow faster than the overall economy, and that's because you're growing off of such a depressed base. You are underbuilding versus long-term demand. Household formations are now at 1.5 million units. You've added almost three million private-sector jobs. You've got five million job openings right now, and you've grown job openings by one million in the last year. So, demand is coming off the sidelines. Thirty-one percent of people between the ages of 25 and 34 are living at home.