Just as things in the real estate sector and exchange traded funds (ETFs) start looking up, numbers come in to remind us that its struggles are far from over with.Many analysts and economists say that the general economy can’t recover until the housing sector has bottomed and begins to cycle back up. In recent weeks, the sector was beginning to show signs of improvement. But then comes the bad news. Today, for example, RealtyTrac came out and said that foreclosures in April rose a whopping 32% from a year ago, reports Adrian Sainz for the Associated Press.
April was the second consecutive month in which at least 300,000 homes received a filing, a volume that RealtyTrac found surprising. What to make of that? Michael Kahn for Barron’s says that no matter which way the short-term takes us, the longer-term has developed a solid base that suggests the worst is indeed over.
The even better news is that unless home-builder stocks reach new bear market lows, the trading range that has been in effect for the past six months will continue to provide a solid base for the next major advance.
This is all just speculation, though. Be prepared for an uptrend, if and when it appears and have a strategy in the works and wait until the 200 day-moving-average is in sight before making a move. The housing market is still proving itself to be a bit unpredictable.
- SPDR S&P Homebuilders (XHB): up 5.6% year-to-date
- iShares Dow Jones U.S. Home Construction (ITB): up 8% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.