The Latest Bad New On Housing

What does it mean for the average American? [View in browser]( [The Juice Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Top Homebuilder Stock Searches This Month Rank Ticker Name Searches #1 [DHI]( D.R. Horton 9,348 #2 [LEN]( Lennar Corp 6,063 #3 [PHM]( PulteGroup 5,367 #4 [KBH]( KB Home 3,698 #5 [NVR]( NVR Inc 3,400 #ad [Dive into Expert Picks - We Spill the Best Daily!]( Brought to you by [DLP Capital]( [Make 2024 the Year of Mailbox Money]( [ DLP Capital - Make 2024 the Year of Mailbox Money]( DLP Capital investors are earning double digit returns with our passive real estate funds. Are you? [Learn more]( The Latest Bad New On Housing Before we get into and illustrate “the latest bad news on housing” — and, yes, it’s pretty bad — a quick look at a group of Trackstar stocks we have been bullish on for quite some time. The homebuilder stocks investors have been searching for most across the platforms of our 100+ financial media partners. Stock 1-month YTD 1-year D.R. Horton (DHI) -12.0% -4.9% +31.4% Lennar Corp (LEN) -9.7% +2.8% +34.9% PulteGroup (PHM) -5.9% +9.7% +69.4% KB Home (KBH) -7.3% +4.4% +47.1% NVR, Inc (NVR) -7.3% +33.8% +26.7% S&P 500 (SPY) -3.9% +6.2% +20.8% So, relative to the S&P 500, the most popular homebuilder stocks have largely underperformed over the last month and YTD. While not necessarily a bloodbath, we’re still in favor of taking profits and moving on. These stocks have had a nice run. At this point, we think the real long-term play in housing is with the best-positioned banks and mortgage lenders. We’ll get into this down the line, but as we have been saying for a long time now, housing prices are about to go through the roof. If you read The Juice regularly, you know this is a longstanding theme. We find it kind of funny to see names only slightly bigger than The Juice coming out with these late-to-the party predictions. For example, real estate entrepreneur and Shark Tank star, Barbara Corocran just recently told Fox Business: The minute those interest rates come down, all hell’s going to break loose and the prices are going to go through the roof. (Right now sellers are) staying put. But they’re not going to stay put if interest rates go down by two points. It’s going to be a signal for everybody to come back out and buy like crazy, and the house prices [will likely] go up by 20%. We could have COVID [market] all over again. Don’t call us crazy, paranoid or, even worse, full of ourselves, but here’s [what we said in early August, 2023](: Even if interest rates do manage to come down, as buyers step off of the sidelines, demand will offset, if not absolutely crush any increased supply. This is precisely when all hell will really break loose in the housing market. Prices will soar, especially in traditionally expensive and competitive markets. Do you think Barabara might read The Juice? And that was hardly the first time we made the point. We have been downplaying any housing market cooldown (because there really hasn’t been one of any meaning) and tracking high and still rising housing prices since late 2022/[early 2023](. Just last week, in [Housing Prices Are About To Blow Past Their All-Time Highs](, The Juice noted: Get ready. Because all of these and other factors are coalescing. They’re getting ready to explode in housing prices reaching prices we never thought possible. When rates come — even a little — it’s going to get even uglier. Read the above-linked Juice after you read today’s for what we mean by “all of these and other factors are coalescing.” Here’s the thing. You could be cynical and say, well you had to be right sooner or later. But we would counter that with, we have been right all along. As we have said all along, this isn’t a story that happens in an instant. It’s not sensational. It’s a story you have to follow over time to truly make sense of. Hopefully, you have been doing that along with us. The latest data is nothing but more bad news on housing prices and confirms our ongoing concerns. Case-Shiller just released its national home price index and it’s up 6.4%, year over year, as of February. The Federal Housing Finance Agency (FHFA) also put out its report on housing prices and found that: - Prices increased by 1.2% between January and February - They’re up 7.0% between February 2023 and February 2024. - They’re up 10.8% in the Mid-Atlantic region, 10.5% in New England and 8.9% in the East-North Central region. They’re up annually in every region. Those are just the leading areas. And, sure, as Bill McBride from the Calculated Risk [blog]( tells us: Seasonally adjusted, San Francisco has fallen 8.2% from the recent peak, Seattle is down 6.1% from the peak, Portland down 4.0%, and Phoenix is down 3.1%. But, here again, this is a non-story. Because single-digit declines from otherworldly prices do absolutely nothing for the average, or even above-average, American. Nothing. Those markets were never affordable (at least not in recent times) and it doesn’t look like they ever will be again. The real story is the rapid bouncing back of housing prices nationally and the increases in once-affordable and soon-to-be, if not already unaffordable markets for an increasing number of people. For goodness sake, Detroit went up by almost 9% in February! And all of this is happening with the interest rate on a 30-year mortgage refusing to budge. It’s at 7.5%. That’s pretty close to October’s high of 8.0% and way up from the mid-to-high sixes we saw at the end of last and beginning of this year. In a nutshell, the housing market was in an unaffordable purgatory for a while. People made choices. Do they jump in the fire or wait a little longer? If they decided to wait, they’re getting impatient and starting to jump. Now, all hell is officially breaking loose as the numbers no longer lend themselves to cherry picking and sugar coating. We don't know where Barbara Corcoran and others were in 2023. But the news was bad then. It’s just a lot worse now. [Adding Color to the Investment Spectrum]( Are Alternative Investments a gray area? Let The Alt add some color! Stay informed with credible articles on Real Estate, Startup, Art, Commodities, AI, and more. [Subscribe for FREE and paint a vibrant picture of your investment strategy.]( The Bottom Line: Looking at the numbers feels as surreal today as it did a week ago, and as it did in 2023. On a $400,000 home, which is a more than a modest price these days, you’ll need $80,000 for a 20% down payment. After you do that, your monthly payment, including taxes and insurance, comes to $2,771 with a 7.5% interest rate. To spend no more than 30% of your income on housing, you’ll need to earn about $9,236 a month, or $110,832 a year. SoFi says the annual average salary in the United States in 2024 is just under $64,000. Some sources put it even lower. This means the middle class can’t afford home ownership, unless they go ultra, ultra, cheap in America. All hell has officially broken loose. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D614302?utm_medium=ic-nl&utm_source=118150 ) News & Insights Freshly Squeezed - [1 Standout Cybersecurity Stock for Dividend Investors]( - [What Are Monthly Dividend Stocks?]( - [11 Best Fast Food Stocks To Buy According to Analysts]( - From The Spill: [Experts Top 5 ETFs With +6% Dividend Yield]( [News & Insights-facebook-share]( [News & Insights-twitter-share]( [News & Insights-linkedin-share]( [News & Insights-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D614302?utm_medium=ic-nl&utm_source=118150 ) [We want to hear from you. 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