Housing Starts Down In September A Sign You Should Buy Housing Related ETF

Matt Thalman - INO.com Contributor - ETFs


Housing starts for September came in at 829,000 units, lower than the 851,000 units reported in August. Some economist and market participants are saying the weak housing starts are a sign the economy is beginning to show signs of wear.

Others have noted that 15.3% of the decline in starts came from parts of the country that were affected by hurricane Harvey and Irma. Furthermore, we can't forget about the wildfires in California, which may not be as impactful as the hurricane's, but still likely played some role in the decline.

Another data point that points to the health of the housing market is the National Association of Home Builders reported their Housing Market Index. In March of this year, the National Association of Home Builders reported their Housing Market Index hit a 71, just one point lower than its all-time high of 72 which was set in June of 2005. If you recall, shortly after June 2005 the housing bubble began to burst, and the housing crisis took down the U.S. economy. The NAHB report their Housing Market Index was at a 68 in October.

What is again interesting about these data point is that when the NAHB's Market Index hit its all-time high in 2005, the housing starts number was at 1.8 million.

Home builders have cited land and labor shortages for the 'low' number of housing starts. This could be a big problem for those looking to buy a home in the future because it could cause prices to skyrocket. But at the same time, that doesn’t mean the home builders will be making money hand over fist because remember their cost is going higher. Continue reading "Housing Starts Down In September A Sign You Should Buy Housing Related ETF"

3 ETF's To Play The Housing Boom

Matt Thalman - INO.com Contributor - ETFs


The true pure play housing stocks have been on a tear lately, as new home construction picks up and industry insiders believe the market could get even hotter as another rate hike is likely in the fall.

In April data indicated that new homes sales grew at the fastest rate in eight years. Furthermore, during the earnings conference call for homebuilder Toll Brothers' (TOL), the companies Chairman Robert Toll said that a rate increase could actually help continue spurring demand.

“What you have with a price increase is an increase in demand created because the price has gone up, which by the way may come to us in the summer months this year,” he said. “If the Fed goes up and the mortgage rates go up an eighth or a quarter, it probably means price increases are coming soon, which spurs demand and spurs action. So it's too early yet to tell, but we could be onto something good.”

If higher rates or just the threat of higher rates is going to help the housing industry than now is the time to buy. Over the last few weeks, the Federal Reserve's meeting minutes and a number of Fed members have hinted that rates will likely increase in the fall. To me, that sounds like at least a threat, if not a clear sign that higher rates are coming soon.

So, what should you buy to profit from a strong housing industry? Continue reading "3 ETF's To Play The Housing Boom"