“Previously Owned U.S. Home Sales Unexpectedly Fell in March,” Bloomberg reported [Monday].
Most economists take an “agnostic” view on housing, like this recent opinion from the New York Times. But some economists saw the latest news as proof the housing market isn’t really coming back.
I disagree completely…[ad#Google Adsense 336×280-IA]My thesis is that housing is in the early stages of an incredible boom fueled primarily by low interest rates…
I believe house prices in America will soar beyond what anyone can imagine.
Getting back to this supposedly “bad” news reported [Monday]…
Yes, it’s true, specifically the NUMBER of previously owned homes that were sold fell by 0.6%.
But that’s less than a percent… no big deal.
The more important thing is, what is happening to the PRICE?
“The median price of an existing home rose 11.8 percent, the most since November 2005,” Bloomberg reported [Monday]… “to $184,300 last month from $164,800 in March 2012.”
This wasn’t a one-off price improvement. According to real estate data provider CoreLogic, house prices have increased on an annual basis for 12 consecutive months. This is a real trend.
To me, the housing recovery trend is unquestionable. And it’s about to get much crazier…
You see, we have a “perfect storm” in place for higher housing prices…
- There aren’t enough homes for sale right now. In January, housing supply reached a 13-year low.
- Meanwhile, demand is high. (My colleague Brett Eversole is buying a house as I write. His mortgage company – a nationwide bank – says it will take 45 days to close on his house, because it’s swamped with buyers.)
- Houses are cheap. We are coming off the greatest bust in housing prices in our lifetimes!
- Thanks to record-low mortgage rates (at around 3.5% for a 30-year mortgage), housing is literally more affordable than ever.
I understand that you can never know the future. But these conditions are as good as it gets for a rise in home prices.
Yes, the data will fluctuate… It won’t be a straight line higher. You will have data like Bloomberg [Monday], where you will see a down month. It’s just like stock prices – even in a roaring bull market, stocks will still have down months.
I believe we are in the early stages of a roaring bull market in housing.
So the number of homes sold fell for one month… Big deal. More importantly, home prices are up 11.8% in the last 12 months – for the biggest gain in more than seven years (since November 2005).
My friend, this is a housing boom. No question.
You haven’t missed it… yet.
Please, don’t miss it… Contrary to what most analysts are saying, I expect this new housing boom will be incredible.