For Many Folks, This Housing Market Requires 'Trading Down'

Like many Americans, Eryn Street wanted to buy a home in recent years... In 2020, she and her partner Jonathan Fuss were moving to Sacramento, California. They were both young professionals. She was a nurse and he was a telecom engineer. [Chaikin PowerFeed]( For Many Folks, This Housing Market Requires 'Trading Down' By Marc Chaikin, founder, Chaikin Analytics Like many Americans, Eryn Street wanted to buy a home in recent years... In 2020, she and her partner Jonathan Fuss were moving to Sacramento, California. They were both young professionals. She was a nurse and he was a telecom engineer. But as they looked at the housing market, they were shocked. In July 2020, they saw that median sale prices in Sacramento had soared from $348,500 the previous year to around $380,000. (Today, they're even higher at $480,000.) Even worse, Street and Fuss discovered that rent prices in the area started at $3,000 a month. The couple thought they were completely priced out of the local housing market. Then Street's mother suggested something they hadn't considered... Recommended Links: ['Today's Market Is a Trap']( If you're holding stocks, you can't afford NOT to see this urgent warning from Altimetry founder Joel Litman. He famously predicted the financial crisis in 2008, and is now sounding the alarm on a similar crisis unfolding on Wall Street – one that'll have dire implications for investors over the next 12 to 36 months. [It's time to move your money](. [Are You Ready for the Great Crash of 2024?]( This year, the S&P 500 Index has posted dozens of new all-time highs... the Federal Reserve just cut rates... and popular AI stocks have experienced an incredible run-up. But what should you expect next? Renowned investor Porter Stansberry just stepped forward with his next big prediction and how he's personally preparing (which you can do, too). [Click here to learn more](. A factory-built home. It's a house that gets shipped to a location – usually in a few sections – instead of being built on site. Depending on the construction date, it's also called a manufactured home ("MH") or a mobile home. When Street looked into the idea, she was surprised by the low prices. The couple ended up paying $109,000 for a three-bedroom/two-bathroom home that was built in 1992. Their monthly payment worked out to around $1,500. That factored in the mortgage, utilities, and $660 monthly lease at the community. Keep in mind that the couple had solid careers. They're not the kind of folks you would picture living in an MH. The simple fact is that mobile homes get a bad rap in terms of public perception. But the reality is that the nicest ones are barely distinguishable from a "site built" house. And most MHs stay in one spot for their lifetime. Street was thrilled to find a home she liked. As she told the Washington Post, "I was surprised by the flow of the home and love the design. It was being remodeled with new flooring and appliances." And the community wasn't anything like the "trailer park" stereotypes. As Street noted at the time, "We love our neighbors and it's really quiet... Everybody's really sweet." This story illustrates two simple facts... For one, our country's housing shortage is forcing folks to "trade down." The problem is especially severe at the lower end of the housing market. Homebuilders didn't build enough "entry level" homes in recent years. Construction of these smaller houses fell steadily over the past 50 years. And it never recovered following the housing bust in the late 2000s. Take a look... As you can see, we've been neglecting the lower end of the housing market for decades. Today, entry-level homes account for less than 10% of new home construction. That's the lowest percentage in history. Sure, lower mortgage rates help with housing affordability. They've already been moving lower this year. But that's clearly not the only piece of the puzzle. We still need more houses. In short, our nation's overall housing problem isn't going away anytime soon. It's a massive, long-term tailwind for companies across the real estate industry. Meanwhile, Street's housing story also shows that manufactured housing is a clear solution to the housing shortage – especially when it comes to entry-level housing. These homes offer huge cost savings versus buying a site-built home. According to a study from the Urban Institute, the average MH is 35% to 47% cheaper on a per-square-foot basis than new or existing site-built housing. These numbers are from a 2017 report. A newer paper from Harvard's Joint Center for Housing Studies notes the cost savings can range from 20% to 46%, depending on the type of MH. Put simply, we can expect to see growing demand for manufactured housing over the coming years. And that means companies that run communities catering to MHs stand to benefit. Good investing, Marc Chaikin Market View Major Indexes and Notable Sectors # Hld: Bullish Neutral Bearish Dow 30 -0.38% 10 18 2 S&P 500 -0.88% 160 284 52 Nasdaq -1.39% 19 59 22 Small Caps -1.36% 541 992 388 Bonds +0.72% Energy +2.28% 1 12 9 — According to the Chaikin Power Bar, Large Cap stocks and Small Cap stocks are Bullish. Major indexes are mixed. * * * * Sector Tracker Sector movement over the last 5 days Utilities +2.09% Communication +1.37% Energy +1.01% Industrials +0.68% Materials +0.4% Financial +0.04% Staples -0.21% Discretionary -0.42% Health Care -0.57% Real Estate -1.03% Information Technology -1.5% * * * * Industry Focus Bank Services 27 56 8 Over the past 6 months, the Bank subsector (KBE) has outperformed the S&P 500 by +4.43%. Its Power Bar ratio, which measures future potential, is Very Strong, with more Bullish than Bearish stocks. It is currently ranked #9 of 21 subsectors and has moved down 3 slots over the past week. Top Stocks [rating] NMIH NMI Holdings, Inc. [rating] BK The Bank of New York [rating] NTRS Northern Trust Corpo * * * * Top Movers Gainers [rating] PAYX +4.92% [rating] APA +4.91% [rating] COP +3.88% [rating] MRO +3.79% [rating] WYNN +3.72% Losers [rating] HUM -11.77% [rating] ETSY -5.82% [rating] MRNA -4.34% [rating] CDW -3.75% [rating] TER -3.69% * * * * Earnings Report Reporting Today Rating Before Open After Close RPM CAG No earnings reporting today. Earnings Surprises [rating] NKE NIKE, Inc. Q1 $0.70 Beat by $0.17 [rating] MKC McCormick & Company, Incorporated Q3 $0.83 Beat by $0.16 [rating] PAYX Paychex, Inc. Q1 $1.16 Beat by $0.02 * * * * You have received this e-mail as part of your subscription to PowerFeed. If you no longer want to receive e-mails from PowerFeed, [click here](. You’re receiving this e-mail at {EMAIL}. For questions about your account or to speak with customer service, call [+1 (877) 697-6783 (U.S.)](tel:18776976783), 9 a.m. - 5 p.m. Eastern time or e-mail info@chaikinanalytics.com. 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