Once again a Fed rate decision is coming. Yet, unlike the rate decision in September, investors are at ease. Recently, we've seen disappointing non-farms, weak retail sales and plunging new home sales. So, given that, it would seem that the Fed's decision is obvious. Of course, investors have come to the conclusion that a rate hike won't be coming. But investors are wrong, both in the perception of a soft US economy and in their conclusion.
Housing Market Not Really Weak
The first argument that Fed doves are using is the weak new home sales figure. It's true; the figure did undershoot. But take a look at US housing in the global scheme of things. It means nothing. In fact, the US housing market is actually getting stronger.
A June 28 headline on CNBC reads, "Homeownership rate drops to 63.4%, lowest since 1967." The report goes on to say "The number of occupied housing units grew, but all on the renter side."
What does this change mean for the future of real estate in the U.S.? Will the recent rebound in mortgages and real estate prices continue?
Listen to this clip from Steve Hochberg's recent presentation at the San Francisco MoneyShow to get Elliott Wave International's unique perspective on the future of the U.S. real estate market (don't miss the link at the bottom to watch 4 more clips from Steve's presentation):
This article was syndicated by Elliott Wave International and was originally published under the headline Despite Low Rates, Housing Rebound is Weak. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.