Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
Will Biden’s Neo-Populist Economic Doctrine Support Gold? - 25th Sep 21
Markets Deflationary Winds Howling - 25th Sep 21
Crude Oil Price Piercing the Sky: Where Will We See the Black Gold by Xmas? - 25th Sep 21
Cryptocurrency policy choices and consequences - 25th Sep 21
The Next Emma Raducanu UK Tennis Star Pleasing the Crowds at Millhouses Park Sheffield - 25th Sep 21
Stock Market Rescued by the Fed Again? - 24th Sep 21
Are Amazon Best Cheap Memory Foam Mattresses Any good? Bedzonline £69 4ft Small Double ECO Example - 24th Sep 21
Evergrande not a Minsky Moment - 24th Sep 21
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Tiny House I Grew up Just Sold for $430k

Housing-Market / US Housing Aug 11, 2021 - 03:11 PM GMT

By: Stephen_McBride

Housing-Market  “$430,000 for THAT?”

My colleague nearly spat coffee on his laptop when I showed him the house my mom just sold.

It’s the white door on the right:

This was the house I grew up in. It gets damp and moldy in the winter. The walls have water damage. The paint is peeling.

And it’s tiny—with two rooms upstairs and two rooms downstairs. It measures just 678 sq. ft.

It’s not in some swanky Beverly Hills-style neighborhood, either. A few murders take place on the surrounding blocks every year. It’s the type of place where “the Pitbulls go around in pairs,” as my grandad would say.

Yet… it sold for close to half a million bucks!
  • Is housing a giant bubble again?

Housing isn’t only booming in Ireland. US housing is on fire too.

In June, US home prices rose at their fastest rate in 34 years, according to S&P Global. The average home for sale was snapped up in just 17 days, a record low.

This boom won’t come as a surprise to longtime RiskHedge readers. We started talking about it and investing in it back in early 2019.

But now, Americans are getting nervous that home prices are rising even faster than before the 2008 crash.

The ‘08 bust was one of the most financially disruptive events of the century. Housing is what I call a “hot stove” investment. It burned a whole generation of Americans, and they’ll be damned if they ever touch that stove again.

  • But this boom is nothing like ‘08...

Remember NINJA mortgages?

Banks handed out roughly $3 trillion to folks with no income, no job, and no assets leading up to 2008.

You don’t see any of this silliness today.

This year, three in every four mortgage borrowers have super-prime credit scores. In other words, FICO scores above 760.

Unlike last time, this boom isn’t built on sand. It’s built on granite. And it’s being driven by a historic housing shortage that won’t be resolved for years...

New analysis by the National Association of Realtors (NAR) shows we need 6.4 million new homes just to meet current demand.

In fact, NAR data shows there are just 1.25 million homes for sale across the US. That’s one of the lowest readings since it started tracking data 40 years ago. It would take just two and a half months to sell every home on the market.

The CEO of Tricon Residential, who runs one of the largest pools of US rental homes, recently told the Wall Street Journal“We get 6,000 calls a week for a home and we’ve only got 200 available.”

  • Now a record number of house hunters are rushing into the market.

Today’s young adults, as you probably know, are called Millennials. They’re the largest generation in US history, bigger even than Baby Boomers.

And they’re hitting prime homebuying age right now.

Take a look at what I call “the most important chart in housing.” It breaks down homeownership in America by age:

The percentage of “kids” who owned a home collapsed to record lows last decade. But now, that percentage is recovering as a tidal wave of young folks are buying their first homes.

Millennials now make up the largest share of homebuyers for the first time ever, according to NAR.

In other words, the largest generation in history is piling into the housing market... at a time when there’s a record shortage of homes to buy.

This is why US housing is smashing every record in the books.

Millennials alone could snap up at least 15 million homes in the next decade, according to mortgage specialist First American Financial.

  • Let me be clear: this is the healthiest housing boom ever.

It’s nerve-wracking to watch home prices rise at their fastest pace in decades.

After living through ‘08, we’re all waiting for it to crash again.

But this isn’t another debt-fueled binge. As housing expert Barry Habib told me last year, ”The most important driver of home prices is supply and demand.”

Today, supply is tighter than it’s ever been. And with record numbers of house hunters entering the market, it all but guarantees the housing boom has years left to run.

  • I’m pounding the table on homebuilder stocks.

My research suggests you can at least double your money in builder stocks in the coming years.

Many homebuilders went bust when the market turned in ‘08. Many more had near-death experiences. This seared one thing into their minds: Don’t overbuild EVER again.

The number of new home starts recently jumped to their highest level since 2006. But builders are still being super cautious. They’re putting up just enough homes to meet demand rather than risk flooding the market.

New data from top real estate analysis firm John Burns shows the number of finished homes collapsed 82% over the past year.

Builders are in control of the most sought-after good in America today: homes.

This is frustrating buyers, but it’s great for homebuilders. A record shortage of homes at a time when millions of first-time buyers are rushing to buy… all but guarantees housing will boom for the next decade.

The Homebuilders ETF (XHB) has doubled since I first wrote about this opportunity in early 2019.

But the best is yet to come for this group. Now is a great time to buy XHB if you don’t already own it.

The Great Disruptors: 3 Breakthrough Stocks Set to Double Your Money"
Get my latest report where I reveal my three favorite stocks that will hand you 100% gains as they disrupt whole industries. Get your free copy here.

By Stephen McBride

© 2021 Copyright Stephen McBride - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in