The S&P/Case-Shiller Home Price Index, a widely followed benchmark for home prices, showed a slow growth in home prices amid an unimpressive housing recovery.
But given the factors underlying this recovery, and the activity in the housing market, this should come as no surprise.
Here's why this housing recovery just can’t seem to take off…
The New Way the Government Is Poisoning the American Dream
Private equity shops and institutional players are buying and packaging nonperforming mortgages from the Federal Housing Administration (FHA) and selling those mortgages to mutual funds and themselves.
On the surface, the HUD wants to minimize the cost to taxpayers. That's really nice of HUD and the FHA, thinking about us taxpayers.But something else is behind this recent action, and it's poisoning the American Dream...
Don't Believe the New Housing Market Index Numbers
This month's Housing Market Index (HMI) numbers would have you believe that this so-called housing recovery is picking up steam.
Figures released yesterday (Monday) show that home builders are both more confident in the current housing market, and are more optimistic for the six months ahead.But even as some will try to spin this narrative that these numbers point toward a substantial recovery, there are more sinister forces at work...
This U.S. Housing Market Is Like 2009 All Over Again
The U.S. housing market is in trouble... again.
Why are there still dark clouds over our supposed economic recovery? We're five years on from the mortgage meltdown, and housing prices have bounced back dramatically and interest rates are at near-record lows.We've said it all along: The housing rally is fabricated. Here’s what it all means…
Profit Massively from This "Margin Call" on American Homeowners
Get ready. There's more trouble ahead for home buyers, home builders, and especially homeowners who took out home-equity lines of credit before the housing crisis. Those heydays have turned into haymakers.What's already started to happen might not only knock out the formerly aspiring but now petering-out housing recovery, but also might knock the already weak economy to the ground.
Back in the good old days, when banks and mortgage shops were selling mortgage money and home-equity credit lines like carnival barkers wowing crowds into the big top, millions of homeowners stepped right in.
That circus tent was nothing but a trap, however. And now I'm going to tell you what that trap means for those borrowers - and the rest of the economy... Full StoryRead More...
Why We're Making These Housing Market Trades Now
Get ready. There's more trouble ahead for home buyers, home builders, and especially homeowners who took out home-equity lines of credit (HELOCs) before the housing crisis.
What's already started to happen might not only knock out the formerly aspiring but now petering-out market recovery, but also might knock the already weak economy to the ground.That’s why we’re making these housing market trades now...
Let's Make the Mortgage Due for Fannie Mae and Freddie Mac
You can call it a bailout, a rakeover - I mean, takeover - or socialism for cash.
But, whatever you call it, it's not going to last.
The $187.5 billion bailout of Fannie Mae and Freddie Mac back in 2008 was absolutely necessary.Yes, we had to do it. But here's why it's time for the government to get out of the mortgage business for good...
- This Echo of the Housing Market Bubble Is About to Triple Loan Payments The housing market is bracing for another shock. Thousands of borrowers who took out home equity loans during the bubble years are now getting alarming news - their monthly payment will soon triple. And as more bubble-era home equity loans reach their 10th birthday, more homeowners will be affected. This 'wave of disaster' is just getting started...
New Rental Securitization Deal Likely Heralds Double Dip in Housing
Today, in New York, investors will be pitched the first-ever REO-to-rental securitization deal. The $500 million deal bundles foreclosed single-family homes, "real-estate-owned" by Blackstone Group, into securities that pass-through rental payments to investors.
The new securitization of rental properties comes at a time when home prices have rebounded dramatically across the country. But rather than confirming a bull market in housing, the "trade," as Reuters calls the transaction, likely heralds a coming double-dip.
The upward trajectory of housing prices, fueled by private equity companies and hedge funds' cash purchases, now faces institutional liquidity demands - and their potential exit.
Here's what the Blackstone deal is all about, why its structure is problematic, how the ratings agencies will view it, and what it portends for the future.
This is a very big deal...
The All-American "Short Squeeze" No One Else Sees
Everyone knows the U.S. housing "recovery" has been resurrected on slippery ground. But now that we're finally about to slip - big time - no one sees it coming...
Then again, how could they?
The numbers are incredibly misleading...
According to the Commerce Department, new residential home sales in July fell a whopping 13.4% from their June sales pace. And sales in April, May, and June were all revised significantly lower.
Yet according to the National Association of Realtors, existing home sales (completed transactions that include single-family homes, townhomes, condominiums, and co-ops) increased 6.5%... to a seasonally adjusted annual rate of 5.39 million in July, from a downwardly revised 5.06 million in June.
On the surface, the divergence is confusing. But not when you look below the surface, where the real money gets made.
As you'll see (before anyone else), the housing "recovery" is just one giant "short squeeze."
And you can make a flat-out killing the moment it ends...
The Rise in Home Prices Isn't Real… At All
Money Morning Capital Wave Strategist Shah Gilani talked with FOX Business' "Varney & Co." today (Tuesday) about a huge red flag in the housing recovery.
Shah has found that we may be on the cusp of a double-dip in home prices.
How Higher Mortgage Rates Will Dent Housing's Recovery
How much do higher mortgage rates reduce home sales?
That, of course, depends on how much rates rise and whom you ask. But there's no doubt higher mortgage rates hurt sales, experts say.
Interest rates have been climbing since May. Rates on 30-year, fixed-rate mortgages averaged 4.37% for the week ending July 18, Freddie Mac's weekly survey of conforming mortgage rates said. That's up more than a percentage point from early May.
And existing home sales fell 1.2% in June, to a seasonally adjusted annual rate of 5.08 million, from 5.14 million in May (but still 15.2% higher than in June 2012), the National Association of Realtors said Monday.
Lawrence Yun, the NAR's chief economist, told Money Morning he expects interest rates to hit 5% to 5.5% within a year. And while he foresees existing home sales rising as much as 10% for 2013, he predicts only a single-digit percentage increase next year primarily because of higher mortgage rates.
"There's no risk of any reversal of this housing recovery; it's just slowing the pace of this housing recovery," Yun said.
He said robust demand and affordable prices would lessen the impact of the higher mortgage rates in much of the country, but pricier markets in New York, parts of California and Hawaii would be hit harder by the higher mortgage rates.Read More...
Big REIT Opportunities in the Housing Market Recovery
Ultra-low interest rates have given an artificial advantage to regions with very high real estate prices, while artificially depressing rents. But that trend is shifting.
And that means that a new opportunity in the real estate market is appearing.
While the herd investors are chasing the real estate rally in all the wrong places, there's a handful of real estate investment trusts (REITs) that are well positioned to profit on this first wave of recovery -- and the second.
Don't get stuck with REITs that will wash out…
How to Profit from the Housing Market Recovery
Housing has rebounded in a big way.
Sales of new, single-family homes surged from April to May at the highest rate since July 2008 and by 29% over the previous year, while existing home sales reached the highest level since November 2009.
And home prices posted their biggest annual increase in more than seven years in May and are expected to continue rising, CoreLogic said Tuesday.
How can you profit from the housing market recovery?
Buying the homebuilders' stocks? Sure, but that's almost too easy, and after impressive gains, homebuilder stocks may have peaked for the short term.
But savvy investors trying to figure out how to profit from the housing market recovery can look beyond the homebuilders to other companies benefiting from the recovery.
Among them: construction materials suppliers, home improvement retailers, paint companies and those manufacturing and selling furniture and appliances.
In fact, furniture and related products led all other manufacturing sectors in the latest Institute for Supply Management report for June.
Here are five companies worth a look if you're seeking to profit from the housing market recovery.
Playing the Housing Market RecoveryRead More...