Rising interest rates will only depress the U.S. housing market further. This is what realtors don’t understand… the best bargains may lie further ahead.
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(PRWEB) November 24, 2011
Michael Lombardi, leading contributor to Profit Confidential, was in Miami last weekend and realtor after realtor was telling him that the biggest condo building bust in history has bottomed out and that it is rebounding with the U.S. housing market. Buyers are snapping up properties, one-third of them paying cash, and the best deals are gone.
Lombardi is not sure he believes them. Or, to rephrase: he’s not sure they understand. Lombardi is the analyst who correctly predicted the housing crash and told his readers to get out of real estate a couple of years before the crash.
We all remember when banks pulled way back on home foreclosures in 2010, as they were accused of not having their paperwork in order when they foreclosed. This put a temporary halt to U.S. home foreclosures. Now that they’ve cleaned up their act, big U.S. banks are actually starting to accelerate their foreclosures.
In the third quarter of 2011, U.S. banks started foreclosures on more homes than at any other time in the past 12 months. According to Profit Confidential, “Banks have a backlog of foreclosures in the U.S. housing market to start work on as a result of the banks cooling foreclosures during the period they were being accused of faulty foreclosure practices.”
According to the National Association of Realtors, U.S. home prices fell in three-quarters of all metropolitan areas in the third quarter of 2011. The median price of homes in the U.S. was down 4.7% in the third quarter of 2011, compared to the same period of 2010. Foreclosure sales still make up 30% of all U.S. housing market activity at the resale level.
Hence, we have a situation where more foreclosed homes are coming onto the U.S. housing market and U.S. home prices are still dropping. But this is not the real problem.
If the Federal Reserve could keep long-term interest rates down for the next 10 to 20 years, the U.S. housing market would have a chance to recover. Unfortunately, the Fed can’t keep rates that low for that long. Interest rates will have to rise sooner rather than later as inflation becomes a problem in America.
Lombardi states “Rising interest rates will only depress the U.S. housing market further. This is what realtors don’t understand… the best bargains may lie further ahead.”
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%. To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.