I apologize for not posting this in a more timely manner. It has been up for a week or so...
Can the American economy be healthy without a healthy housing market? That is more than just an idle conversation-starter these days. People are tied to housing in many ways; it is often the largest single investment, expense and debt that a person will ever undertake. (Ready to take the plunge? Check out Top Tips For First-Time Home Buyers.)
Given what a powerful force housing was in the economy before the bubble popped, it seems fair to assume it will continue to be significant. Even if people cannot leverage their houses into consumer spending as they used to, the health of housing affects family balance sheets, which in turn impacts small business creation, personal consumption, investment and overall economic activity. After all, what difference does it make if there are ample jobs in North Carolina if you are stuck in underwater mortgage in California and cannot afford to move? (For more on getting out from an underwater mortgage, read Selling Your Home For Less Than The Loan.)
Here, then, are five key factors to watch in anticipation of an eventual housing recovery.
For the full column, please continue to:
http://financialedge.investopedia.com/financial-edge/0710/5-Factors-To-Watch-In-A-Housing-Recovery.aspx
Showing posts with label Lumber futures. Show all posts
Showing posts with label Lumber futures. Show all posts
Monday, July 12, 2010
Friday, June 18, 2010
Lumber Does Not Bode Well For Housing
I would like to mention that this column was written *before* the housing data came out the other day...
Over the last year or so, home building stocks as measured by the S&P Homebuilders SPDR (NYSE:XHB) have had a pretty respectable run, topping the S&P 500 by about 20% or so. Of course, it must also be mentioned that this is a strong recovery off of a deep bottom, as a four-year comparison shows a painful drop of over 60% for holders of this ETF.
Among this year-long rebound has been a muddle of mixed messages, as sentiment feels worse than the numbers look. Low interest rates and tax credits have encouraged some buyers to get back in the market, and banks seem to be reporting some stabilization. Going a step further, prices seem to be creeping up again, housing inventories have leveled off, and sales appear to be growing.
That has not really been good news of late, though, for the shareholders of stocks like Pulte (NYSE:PHM), D.R. Horton (NYSE:DHI), Lennar, or Toll Brothers (NYSE:TOL) as these stocks have all come off their highs lately. If these stocks can move unpredictably in the face of economic data, is there another data source for investors to watch?
The answer appears to be "yes".
To read about the linkage between lumber futures and housing stocks, continue on to:
http://stocks.investopedia.
Over the last year or so, home building stocks as measured by the S&P Homebuilders SPDR (NYSE:XHB) have had a pretty respectable run, topping the S&P 500 by about 20% or so. Of course, it must also be mentioned that this is a strong recovery off of a deep bottom, as a four-year comparison shows a painful drop of over 60% for holders of this ETF.
Among this year-long rebound has been a muddle of mixed messages, as sentiment feels worse than the numbers look. Low interest rates and tax credits have encouraged some buyers to get back in the market, and banks seem to be reporting some stabilization. Going a step further, prices seem to be creeping up again, housing inventories have leveled off, and sales appear to be growing.
That has not really been good news of late, though, for the shareholders of stocks like Pulte (NYSE:PHM), D.R. Horton (NYSE:DHI), Lennar, or Toll Brothers (NYSE:TOL) as these stocks have all come off their highs lately. If these stocks can move unpredictably in the face of economic data, is there another data source for investors to watch?
The answer appears to be "yes".
To read about the linkage between lumber futures and housing stocks, continue on to:
http://stocks.investopedia.
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