Home remodelers serve two markets. The first is rich people who want a second dishwasher. The second is people who cannot sell their house, so they're stuck adding a deck to the one they hate.
Both groups now want opposite things. The headline calls this "mixed messages." That's a polite way to say the industry is a golden retriever hearing two whistles.
The cause is the frozen housing market. Homeowners locked in cheap mortgages. They won't sell, because trading a low rate for a high one is financial self-harm. So they renovate instead. Nothing says love like a quartz countertop in a house you secretly despise.
Meanwhile, the other market, the move-in-and-flip crowd, sits idle. No turnover means no fresh buyers gutting a kitchen on day three. Somewhere a contractor named in zero press releases stares at a pile of subway tile and weeps.
Retail traders will read this and buy a homebuilder ETF. They'll call it a "remodeling thesis." They will have never held a hammer. Their closest brush with construction was watching a YouTube video about a tiny house and calling it research.
Here is the technical read. The chart shows two lines moving in opposite directions. Analysts call this a "divergence." I call it a Tuesday.
The mixed messages are real, and I respect them. At least a remodeler can look at a wall and know whether it's load-bearing. You can't say that about your options position.
Your portfolio is the only thing in America still waiting on a permit that will never come.
Photo by Veronika Dee on Unsplash
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