The U.S. economy cannot, and will not, have a meaningful recovery until the U.S. housing market is fixed.
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New York, NY (PRWEB) December 20, 2011
According to Michael Lombardi, lead contributor to Profit Confidential, two major hurdles remain for the U.S. housing market.
This week, the National Association of Realtors (NAR) is scheduled to revise down its previously reported sales of U.S. homes from the period of January 2007 through to October 2011. The NAR reported that it had made a mistake in past calculations on home sales and was double counting. Lombardi says he’s not surprised.
“This tells me that the U.S. housing market is still depressed,” says Lombardi. He writes in Profit Confidential, “The U.S. economy cannot, and will not, have a meaningful recovery until the U.S. housing market is fixed.”
“When I want to know how the U.S. housing market is doing, I don’t look at the NAR statistics,” says Lombardi, “This is lagging indicator. The leading indicator I follow is the Dow Jones U.S. Home Construction Index.” This is a weighted average of the stock prices of the 34 largest U.S. homebuilders.
The chart of the Dow Jones U.S. Home Construction Index is telling Lombardi that the U.S. housing market continues to be a problem. The Index is still far below its 2007-2008 highs.
According to Lombardi, the two major hurdles remaining in the housing market’s recover are as follows:
One in four U.S. homes with mortgages is worth less than its mortgage today. Lombardi believes this will take decades to sort out. By the time the bottom in the U.S. housing market is reached, interest rates will be rising to offset the inflation created by all the money printing.
“The remainder of this decade for the U.S. housing market—doomed,” says Lombardi.
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.
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