Were Stocks to Follow Housing Market, S&P Would Trade Below 700!
It turns out that the mood of builders is a terrific stock market bellwether: The correlation between current builder confidence and future stock market returns over the past ten years is downright unnerving. Why worry now? Over the past year, the NAHB housing index plummeted 54%. Were stocks to follow suit, the S&P - 1400 in late October - would be trading below 700 this time next year.
Can the Economy Survive the Housing Bust?
- Real Trends newsletter thinks the Real estate brokers industry might end up loosing some 15% of its workforce or 200,000 agents.
- In many once-hot regions, house order cancellation rates are running above 40%, new-home sales volume has dropped 50%, and new-home prices are down 10% to 25%.
- U.S. homeowners pulled more than $450 billion in equity out of their homes last year and are on pace for a similar bonanza in 2006. But the falling home prices could stall this.