John Pitera's Market Laboratory Message Board

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Strategies & Market Trends : John Pitera's Market Laboratory

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John Pitera

To: John Pitera who wrote (14241)	7/1/2013 1:46:02 AM
From: Riskmgmt	1 Recommendation Read Replies (1) of 33421

Hi JP, I want to thank you for the time and effort you put in to making this thread a must read for serious investors. I would caution you against concluding "Housing has absolutely topped." based on your mortgage broker friends comments. There is plenty of evidence to suggest otherwise. Yes, if rates were to continue on an upward trajectory it will have an impact but everything is relative as you well know. Here is a table of average mortgage rates over the last 30 years: freddiemac.com Mortgage rates as you can see from the table were averaging 10% in the mid to late 80's hitting 17%+ in '82 so even a 4.5 -5% mortgage is historically low. All Real Estate in local and Houston is atypical of most markets. In other Sunbelt states for example prices are off 30-60% from 7 years ago so even a 1% higher interest payment has little affect. Also, we have, in many areas the highest return ratio on rentals in decades at todays bargain prices attracting lots of private cash buyers as well as hedge fund money. So you friends comments not withstanding I think there is plenty of steam left in housing for the foreseeable future. regards, R.

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