Rising Rates Didn't Crash Housing in the '70s... And It Won't Happen Today

Rising interest rates won't crash the housing market... There, I said it. And it probably sounds a little crazy. But hear me out... [Chaikin PowerFeed]( Rising Rates Didn't Crash Housing in the '70s... And It Won't Happen Today By Briton Hill, analyst, Chaikin Analytics Rising interest rates won't crash the housing market... There, I said it. And it probably sounds a little crazy. But hear me out... Most industry experts will tell you that rising rates are putting pressure on housing prices. And they're right that housing But in the past, interest rates have been far higher than they are right now. And during that period, housing outperformed nearly every other asset class. It's true. Let's get to the details... Recommended Links: [Wall Street's 'Reckoning' Hits in the Next 60 Days]( The largest hedge funds like Millennium Management, Citadel, Point72, and more are now anxiously awaiting the greatest Wall Street event of 2023. More than $10 trillion and more than half of the U.S. stock market will be impacted... And abnormally large gains – and losses – are set to follow. Get a free recommendation AND learn how to prepare [here](. ['If I Had to Put ALL My Money Into ONE Investment, THIS Would Be It']( A top analyst goes on record: "This is it, the No. 1 investment to buy today." For a short time, he's sharing the full details of the best investing setup he has seen in his 20-plus-year career. It's a rare opportunity that could make you 10 times your money, no matter what the market does next. [Click here for details before today's opening bell](. In short, I'm talking about the 1970s and early 1980s. Inflation ran rampant back then – even worse than today. And interest rates surged... They rose all through the 1970s. As you can see in the following chart, the 30-year mortgage rate peaked at nearly 19% in October 1981... [Chaikin PowerFeed] That should've devastated the housing market, right? After all, double-digit interest rates made it expensive for folks to pay their home loans. And that should've wrecked demand. Not so fast. Take a look at this chart of U.S. home prices over the same period... [Chaikin PowerFeed] As you can see, housing prices rose steadily throughout the 1970s. And this uptrend happened in spite of mortgage rates being three times higher than they are today. In 1970, the median home price was $22,100. By 1980, the price had nearly tripled to $62,900. That's an annualized rate of return of roughly 11%. Clearly, housing wasn't crushed by rising interest rates. And the reason why is simple... Uncle Sam stepped in with numerous federal programs to prop up housing – especially for low-income families. Congress passed the Equal Credit Opportunity Act and the Community Reinvestment Act. The government also created tax subsidies – like Section 121, which allowed for a $100,000 one-time exclusion in capital gains for sellers 55 years or older. And it later increased the exclusion to $125,000 in 1981. These subsidies nurtured a resilient housing market. And today, we're starting to see the federal government step in again... For example, a few weeks ago, the Federal Housing Finance Agency announced mortgage applicants with low credit scores would receive a break on their fees. And you can bet that plenty more subsidies are coming down the pipeline. For millions of people, homeownership defines the American Dream. Uncle Sam will do his best to protect that. I bet on real estate and rising interest rates with my hedge fund last year. People thought I was crazy... Some of my investors wanted me ousted. They didn't want to believe the data. But I stuck to my guns, and it paid off. I returned 9.3% for my investors. That might not seem like much, but it was much better than the S&P 500 Index. The benchmark stock index fell around 19% over the same period. Here's my point... You'll hear a lot of "fear" rhetoric about housing in the mainstream media these days. That can cause investors to make emotional, irrational decisions. And it can lead them into even poorer investment choices. Don't fall victim to the fearmongering. Stay positive. And remain "bullish" on housing. Good investing, Briton Hill Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 +1.30% 8 19 3 S&P 500 +1.19% 144 264 90 Nasdaq +1.21% 53 33 14 Small Caps +2.29% 441 915 524 Bonds -0.29% Consumer Discretionary +2.08% 26 22 5 — According to the Chaikin Power Bar, Small Cap stocks remain somewhat more Bearish than Large Cap stocks. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Communication +2.67% Information Technology +1.71% Discretionary +1.41% Financial +1.34% Industrials +0.29% Staples -0.46% Materials -0.97% Energy -1.18% Health Care -1.32% Real Estate -2.43% Utilities -4.25% * * * * Industry Focus Aerospace & Defense Services 3 22 6 Over the past 6 months, the Aerospace & Defense subsector (XAR) has outperformed the S&P 500 by +0.34%. However, its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #11 of 21 subsectors and has moved up 4 slots over the past week. Indicative Stocks [rating] KAMN Kaman Corporation [rating] MRCY Mercury Systems, Inc [rating] AJRD Aerojet Rocketdyne H * * * * Top Movers Gainers [rating] CMA +12.33% [rating] ZION +12.08% [rating] KEY +8.64% [rating] LNC +8.15% [rating] KEYS +7.60% Losers [rating] AON -2.63% [rating] RE -2.48% [rating] ILMN -2.20% [rating] PODD -2.10% [rating] RMD -2.08% * * * * Earnings Report Reporting Today Rating Before Open After Close AMAT BBWI, WMT DXC, ROST No earnings reporting today. Earnings Surprises [rating] PGR The Progressive Corporation Q1 $0.66 Missed by $-0.69 [rating] TGT Target Corporation Q1 $2.05 Beat by $0.26 [rating] CPRT Copart, Inc. Q3 $0.72 Beat by $0.08 [rating] TJX The TJX Companies, Inc. Q1 $0.76 Beat by $0.05 [rating] TTWO Take-Two Interactive Software, Inc. Q4 $0.63 Missed by $-0.04 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. 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