Housing Market Bottom?

Saturday, September 13, 2008

The recent action in the SPDR Homebuilders exchange traded fund looks to be forecasting a bottom in the housing market. If we assume that the market is a forecasting machine reflecting expected changes six months ahead of time, we have a bright future. The XHB put in a bottom on July 14th closing at $14.61 and closed Friday at $21.26 representing a 46% gain. This sizable gain seems to imply the stock market's belief that the housing market will find a bottom by the end of the year. If this is true, many of our country's recent struggles will be markedly helped as falling home prices have been at the crux of our overall problems.


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