Displaying items by tag: housing

(New York)

Most of this summer was dominated by the dual fears of a trade war and a recession. A weakening of underlying economic data backed up the view that we may be headed for a recession, and the long yield curve inversion only heightened those fears. However, new economic data is providing a pretty strong rebuttal to those ideas. The last four economic releases, including home sales, jobless claims and beyond, have all come back more strongly than forecast.


FINSUM: The economy never looked that bad, as it was mostly the yield curve and trade war that pushed fears of a downturn. Accordingly, we don’t think these recent data releases will have much of an effect one way or the other.

Published in Eq: Total Market
Monday, 15 April 2019 13:23

Another Housing Boom is Coming

(New York)

The market has been fretting about real estate for over a year now. Numbers in the sector have been in a funk and there is a definite weakening occurring. However, that may prove short-lived as a new factor may slowly push that market back into a sustainable boom cycle. That factor is the grow of $15 per hour minimum wages across the US. Such wages are likely to significantly increase the earning power of millions of Americans, allowing many couples to afford to buy a home. For instance, a couple with one worker at Target and another at Bank of America could afford to buy up to a $300,000 home at the new wage levels.


FINSUM: If the new higher wage rate takes hold, it is likely to unlock a major source of untapped demand for housing.

Published in Eq: Real Estate
Thursday, 11 April 2019 13:51

Big Housing Bust to Come

(New York)

How does a big global housing meltdown sound? Crappy. Well, that is exactly one of the things that the IMF is currently warning investors about. Americans will already be well aware of the several month downturn in real estate, but what is likely much less well understood is that many markets around the world, including emerging markets, look at risk of a major housing bust. One of the big worries of the IMF is that a real estate downturn will spark a banking crisis in overseas markets that could then bubble over to the rest of the world.


FINSUM: We don’t tend to think of real estate as a particularly globally-correlated asset class. However, the banking industry that underpins it certainly is, so the risk is definitely there.

Published in Eq: Real Estate
Thursday, 28 March 2019 12:39

The Economy is Floundering

(New York)

Another day, another round of bad news on the economy. In what comes as another round of disappointing data, GDP for the fourth quarter was just revised downward from 2.6% to 2.2%, showing the economy finished the year on a softer note than expected. The data adds to the list of poor numbers—labor, housing etc—that have been hitting investors.


FINSUM: Weak economic and housing data have been flowing like a hose lately, and today is no different. This will only add to the downward momentum in yields.

Published in Eq: Total Market
Wednesday, 27 February 2019 13:42

Big Trouble in Real Estate

(New York)

Another month, anther patch of really rough data on the US real estate market. New data from December has just been released, and shows a clearly negative trend for the market. Housing starts dropped 11.2% in the month, and overall, the market saw the worst price growth (4.7% in major metropolitan areas) since 2014. Stock market turbulence and higher rates plagued the market at the end of 2018.


FINSUM: We have seen many months of deteriorating real estate performance. The big question now is whether the market can rebound in time for the peak spring selling season.

Published in Eq: Real Estate
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