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Homes and trucks: friends forever?

Mark Garrison Jul 28, 2015
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Homes and trucks: friends forever?

Mark Garrison Jul 28, 2015
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Tuesday morning brings Ford’s quarterly earnings report, as well as the S&P/Case-Shiller Home Price Indices. The two events have a stronger economic link than one might think, because home building affects the Big Three automakers’ big time moneymakers, pickup trucks.

If builders are busy, they’re also confident enough about the future to upgrade to pickup trucks like the Chevy Silverado, Ford F-150 and Dodge Ram that haul lumber and supplies. And with home building on a post-crisis upswing, it looks like beat-up trucks are getting traded in.

“Pickup trucks got older and now for people who are users and put a lot of wear and tear on the trucks and a lot of mileage on the trucks, there’s a replacement cycle,” says auto analyst Maryann Keller.

There could be room for more growth in home construction too. According to housing economist Michael Carliner, there could be a 20 percent jump in single-family home construction from this year to next.

“We’re still building at a rate that’s well below what the underlying fundamentals would dictate,” he explains.

A further uptick in housing starts could put money not just in pockets of construction workers, but ultimately auto workers too.

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