What Goldman Sachs Is Getting Wrong About the Next Housing Crisis

[Intelligent Income Daily]( Welcome to Intelligent Income Daily, the brand-new free daily newsletter from wealth and income expert Brad Thomas. Brad’s experience spans three decades of real estate and stock market booms and busts. Today, he and his team focus exclusively on the safest and most predictable ways to earn sustainable and growing income in any market condition. You can find all past issues [here](. And if you have any questions, please contact Brad and his team [here](mailto:memberservices@widemoatresearch.com). What Goldman Sachs Is Getting Wrong About the Next Housing Crisis By Stephen Hester, Analyst, Intelligent Income Daily [Stephen Hester] People feel more pain from bad investments than joy from good ones. It’s scientifically proven. They’re so focused on not repeating past mistakes that it clouds their judgment. This even applies to Wall Street giants like Goldman Sachs. The firm recently released a report that several U.S. cities will see a “2008-style housing crash.” That’s the same Goldman Sachs that would have gone bankrupt without a bailout (from you and me) during the Great Recession – caused by a housing crash. Goldman was completely wrong about the last big housing crash. And I don’t think it’ll be right about this call, either. That’s because it’s making the same mistake retail investors do… Goldman is extremely confident the housing market is going to crash – just like the last recession. Today, I’m going to change your mind on the sector Goldman Sachs is so bearish about. Better yet, I’ll provide a unique way you can profit from its misplaced gloom. Recommended Link [Replay Now Available: The Looming 44-Day Crash with Jeff Clark]( [image]( According to the man who predicted the 2000, 2008, and 2020 crashes… The next 44 days will be the most important days of the year. Depending on how you act, 44 days from now, you could be in deep financial trouble or well on your way to reach your retirement goals. [Click here to see the details.]( -- Three Reasons This Market Is Different From 2008 The 2008/2009 financial crisis is seared into the mind of every investor who lived through it. I was a young trader at a hedge fund back then. I remember when the feds took control of Fannie Mae and Freddie Mac. And the $150 billion bailout by taxpayers to keep the two agencies afloat. There was a mix of terror and excitement on the trading floor. Millions made and millions lost. Many keyboards became casualties on the tougher days. And it was all tied to the housing market. Nationally, U.S. home prices fell 13.9% during the Great Recession. In some areas, like California, home prices fell as much as 50%. The shockwaves reached every corner of the economy. Peak unemployment was 10% by October 2009. Currently, home prices are 50–60% above the previous peak. That’s got everyone – including Goldman Sachs – believing the housing market is set to crash once again. And that it’ll drag the economy down with it. But I don’t think so. And not because I haven’t learned the lessons of 2008/2009. It’s because I have. That lesson is simple… Fundamentals are the driver of every crisis. Not housing. Not banks. Not oil. Those are just the symptoms of the disease. [Expert reveals startling new prediction about America’s future]( The key to navigating the next recession is knowing what’s infected – and what’s not. Without that knowledge, where will you invest? No one got rich by sitting on the sidelines. Those betting on housing to lead us into another Great Recession are looking at the news instead of the data. But don’t worry, you don’t need to know every fact. I’ll give you the three most important ones. By 2007, 20% of home mortgages went to subprime borrowers. These were people that never would have been given a loan during normal times. 75% of those subprime loans were adjustable-rate mortgages. The housing market was a giant ticking time bomb. And it went off. Today, subprime loans are far less common. And unlike back then, they are tightly regulated by the Consumer Financial Protection Bureau. That and other regulations born out of the Great Recession make subprime borrowers face strict standards. Banks that don’t follow the rules face lawsuits and costly fines. There is no “Wild West“ subprime market like before. Adjustable-rate mortgages (ARMs) were another major problem. Unlike the Great Recession, today’s ARMs have stricter standards than traditional mortgages. ARMs have 10-year terms or less. Struggling borrowers don’t choose a much more expensive 10-year term over a cheaper 30-year. Today’s ARMs are owned by sophisticated borrowers with higher credit scores than average. No comparison here either. The last factor is supply and demand. The chart above shows how many months the current supply of new homes would last, assuming no new homes are built. You can see the current supply should last around six months. That’s a healthy number. As you can see the stable years in between tend to stay closer to 6 months. It was a year during the Great Recession. Once again, they don’t compare. How to Profit While Others Dread the Worst At Intelligent Income Daily, we bring you the best income ideas to profit while the rest of the market hides in fear. And based on the combination of the factors mentioned above, there’s one company we believe is gearing up to profit… Invitation Homes (INVH) is the single-largest owner of single-family rental homes in the U.S. Low affordability to buy a home means more people need to rent homes. And fears about the housing market have driven Invitation Homes (INVH) down to very attractive levels. The stock has historically traded with an earnings multiple above 25. You can pick up shares today at 19 times. That’s a 25%+ sale. Investors will gain 38% – plus the nearly 3% annual dividend – if shares return to 52-week highs. Goldman Sachs and other financial powerhouses continue to predict a market downturn. And there’s a chance it could come. But the data shows that, unlike what they’re expecting, the housing market won’t be the epicenter this time around. So rather than avoiding the space in fear, intelligent investors will see this as a chance to set themselves up to profit. Best regards, Stephen Hester, CFA Analyst, Intelligent Income Daily P.S. A market downturn could be devastating if you’re not prepared. And even if it doesn’t stem from the housing market, there’s a chance we could see plenty of market turbulence this year. That’s why we’ve curated an income strategy that’s designed to help you protect and grow your wealth in all market conditions. [Learn more about it here.]( IN CASE YOU MISSED IT… [“What I’ve learned is going to shock most people...” – Nomi Prins]( What if America’s next crisis looks nothing like the last? It’s the reason why I’ve been invited to meet with the folks at some of the most powerful organizations in the world, like... · Federal Reserve officials... · The International Monetary Fund... · The World Bank... · Google · The United States Senate · The Tokyo Stock Exchange... · ...and The London School of Economics... – working so hard to help people take charge of their money. And prepare for what’s coming... [Click here to watch my bombshell prediction.]( [image]( Get Instant Access Click to read these free reports and automatically sign up for daily research. 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