There's Reason to Be Excited About the U.S. Housing Market

Economic data and corporate earnings reports released on Tuesday make it easy to remember why the housing market is expected to be one of the U.S. economy's bright spots for years to come.

Home Depot Inc. and Toll Brothers Inc. reported their calendar fourth-quarter 2015 results before the market opened, both exceeding analyst estimates on the top and bottom lines. Douglas Yearley, chief executive officer of Toll Brothers, said a dearth of labor crimped the luxury-home giant's operations by extending build times, a sign of strong activity in the sector. During an interview on Bloomberg TV, Yearley noted that he didn't see any recessionary conditions in the U.S. but cautioned that volatility in financial markets was beginning to weigh on deals.

A larger-than-expected decline in new home purchases last month, tied to a drop in contract signings in the western U.S., was seen as a return to a steadier post-recession pace. Persistent job creation, signs of bigger wage growth and cheap borrowing costs are buoying sales and helping alleviate the weakness in factory output tied to sluggish global demand.