Yes that may be true...
But if the market really thinks the Fed is done tightening - then shouldn't the US Dollar be headed down vs. gold/euro/swiss franc very soon?
I think this explains it:
1. Better Reported Jobs # = more potential homebuyers - therefore buy HBs.
2. If inflation rises, real estate will "hold its value" - therefore buy HBs.
3. If inflation declines (or deflation comes), interest rates fall... each home buyer can buy more for the same monthly payment - therefore buy HBs.
4. If inflation is "modest", then we're in a "goldilocks" economy and everyone should work toward the American Dream of home ownership - therefore buy HBs.
5. If new home sales flatline or even fall, non-public (and less well-capitalized) HB companies will lose market share to publicly-traded HBs - therefore buy HBs.
6. If immigration swells, there are more potential homebuyers - therefore buy HBs.
7. If immigration declines, there are fewer "illegals" crowding the public schools, hospitals, etc - that means cities/counties/states won't have to increase property taxes as much which of course means "why rent and pay someone else's mortgage" - therefore buy HBs.
8. If stock market goes down or simply stays flat, real estate is clearly a better investment - therefore buy HBs.
9. If stock market goes up, the corresponding "wealth effect" will entice people to buy newer and bigger homes - therefore buy HBs.
10. If real estate in Austrailia, Britain, etc stops rising or starts going down then it clearly means that real estate in America is a safer investment - therefore buy HBs.
11. If there is another terrorist attack it will convince everyone that the are better off investing in something "tangible and something you can touch and feel" (you can't live in a stock certificate you know?) - therefore buy HBs.
12. If US Dollar declines, more foreigners can buy American homes - therefore buy HBs.
13. If US Dollar starts to rise in value, more foreigners will switch out of euros/yen/etc and into dollars AND use that money to buy appreciating real estate - therefore buy HBs.
14. If HB insiders are buying their stock (WLS), they must "know something" so smart money will ride their coattails - therefore buy HBs.
15. If HB insiders are selling their stock (TOL), this is a good thing because many mutual funds can only buy stock in companies with a minimum float - therefore buy HBs.
16. If there natural disasters (hurricanes, floods, earthquakes, etc) that devestate an area and damage many houses, this will of course be an economically beneficial thing as the federal government will give out money like crazy... plus the supply of houses has now dropped in the area which means prices will of course rise - therefore buy HBs. |
