The Downward Spiral In Housing Begins…

      • Mortgage applications continue to plummet.
      • Housing starts take a big drop in June.
      • The increase in the homebuilder sentiment index is deceptive.
      • Homebuilder stocks are negatively diverging from the S&P 500.

With middle class household income after inflation declining and the first-time homebuyer cohort over-leveraged on student loan, credit card and auto loan debt, it’s no wonder that mortgage applications filed to purchase a home are plunging.  Folks, the demographic I just described historically is the majority of the housing market – not big institutional funds and flippers looking to make a quick buck.   If first-time buyers and middle class “move-up” buyers aren’t buying, the market eventually collapses.

With propaganda in ALL areas of our economic and political system now at levels that would make George Orwell put a gun to his temple and pull the trigger, I’ve sifted thru the nonsense coming from Wall Street and CNBC and have written an article explaining why the next down-leg in the housing market is about to unfold.

You can read my article here:  Mortgage Apps And Housing Starts Tank.

The two biggest warning flags:   home sales are dropping during what is supposed to be the strongest period seasonally of the year for the housing market and homebuilder stocks are in a downtrend despite that fact that the S&P 500 is headed to the moon.

I have yet to hear any of the housing market bulls explain any of the factors described above…

9 thoughts on “The Downward Spiral In Housing Begins…

      1. Thanks Dave…I also bought your last report and have invested in that also. Got in at .75 so needless to say I have a lot of them…:)

        1. We own them in all in my investment fund and I own them personally. Was going to put Minco Silver in the fund until the management wouldn’t call me back and I put even more analysis into the issues I needed them to clear up.

  1. GREAT news for once, comrades!
    your tax slate has been wiped clean.

    july 21
    Days after IRS officials said in a sworn statement that former top agency employee Lois G. Lerner’s computer memory had been wiped clean, the agency put out word to contractors Monday that it needs help to destroy at least another 3,200 hard drives.

    The Internal Revenue Service solicitation for “media destruction” services reflects an otherwise routine job to protect sensitive taxpayer information, but it was made while the agency’s record destruction practices remain under a sharp congressional spotlight.

    http://www.washingtontimes.com/news/2014/jul/21/irs-seeks-help-destroying-another-3200-computer-ha/#ixzz38De5mVTB

  2. I found it comical that a notable real estate blogger called today’s existing home sales report “solid”. Not too solid when you consider that sales were negative year-over-year while mortgage rates are actually lower than the same time a year ago.

    In the spirit of full disclosure I should note that I sell homes for a living….not bullshit.

    Some “recovery”!

    1. LOL. You are one of the few honest ones. I’m working on an article for SA right now that discusses those points you raise. If you drill down into the data, you’ll see the results were anything but “solid.”

  3. Most young people I know (I now work in retail) are barely making it at 20 hours a week/$8.25 a hour or are getting into a lot of debt with college loans (that they will default on) for that BS degree to work at their local grocery store (I used to work at an university for 12 years). or they are getting laid-off:

    07/10/2014
    Family Dollar profit falls 33%

    “Family Dollar said Thursday that profit during its most recent quarter fell by a third, news that’s unlikely to help the discount retailer’s attempts to fend off an activist investor who wants the company sold.

    During a conference call with investors Thursday morning, chief executive Howard Levine talked how the company plans to improve its results, such as closing under-performing stores and selling alcohol at Family Dollar locations.”

    http://www.columbusceo.com/content/stories/apexchange/2014/07/10/with-predators-at-its-door-family-dollar-profit-falls-33.html

    What’s going to happen as the younger generation can’t find work or work that even pays the bills? Riots! (or war with Russia).

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