In This Market, Are You A Winner Or A Loser?

Sometimes timing really is everything [View in browser]( [The Juice Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Top Homebuilder Stock Searches This Month Rank Ticker Name Searches #1 [DHI]( DR Horton 8,523 #2 [PHM]( PulteGroup 7,521 #3 [LEN]( Lennar 4,762 #4 [KBH]( KB Home 3,013 #5 [NVR]( NVR Inc 2,928 #ad [Dive into Expert Picks - We Spill the Best Daily!]( Brought to you by [Investors Alley]( [BREAKING: June 26 Deadline: The #1 Monthly Dividend ETF]( [ Investors Alley - BREAKING: June 26 Deadline: The #1 Monthly Dividend ETF]( A massive Bitcoin dividend was just announced... And if you act today, you'll receive $2.05 per SHARE. That's 161% BIGGER than the highest-yielding dividend aristocrats... But you have to get in before the June 26 cutoff date. [Click here now for all the urgent details.]( In This Market, Are You A Winner Or A Loser? Because we read everything we can get our hands on about housing, every few weeks or so, The Juice likes to summarize some of the most interesting housing news and research. Let’s do that today, checking out the best of the best from the last little while. The housing market used to be a lot like the stock market. At least for a time. You simply bought, held and sat pretty. The value of your home went up — often, by quite a lot — then, if you wanted to move, you sold and used your proceeds to purchase another home. Maybe that home was bigger and better to accommodate your needs. Maybe the payment was the same as or less than what you had before. Hell, some people (and corporations) were even crushing it by flipping houses. In increasingly rare instances, more of the same is probably taking place. However, more often than before — seemingly much more often — you’re either a winner or loser in this housing market. And, even if you’re a winner, you might still consider yourself a loser. For example, you bought when rates were low. Now, you want to sell so you can upgrade, but you don’t want or can’t afford to take on the mortgage payment that comes alongside today’s high interest rates. Or you want to buy, but you can’t afford the payment for the same reason. So, you’re on the sidelines, wishing you had bought, say, before or at the beginning of the pandemic. Realtor.com recently released a [study]( showing that “the typical listed home price grew by an astounding 37.5% overall, from May 2019 to May 2024.” And, of course, in some parts of the country, the upside has been way higher than 37.5%. Five metro areas saw home equity increase by more than 50%: - Nashville: 57.1% - Los Angeles: 55.1% - Providence, MA: 54.2% - Austin: 52.3% - Memphis: 52.1% Realtor.com reaffirmed something The Juice has been saying and can’t keep saying enough: The housing market has cooled significantly since the frenzied days of the pandemic, largely due to mortgage rates doubling over the past few years. (They’re now hovering near 7%.) That spike forced potential buyers to the sidelines to wait for more affordable terms on their home loans. But what hasn’t cooled is home prices: The national median list price reached $442,500 in May, up from $441,000 at this time last year, indicating that home prices have barely budged. Why are prices still sky-high? Blame the ongoing lack of homes for sale nationwide. Yes. Exactly. Or, in our words, a cooldown doesn’t equal affordability for large swaths of the population despite the way many headlines read. And, while lower interest rates (eventually) will bring more homes to market, it will bring as many (and probably more) buyers off of the sidelines, not to mention home sellers who have to buy another place. Quite a few will be flush with cash to spend from all of that equity. As Bill McBride noted in his excellent [Calculated Risk]( blog: We will NOT see a surge in foreclosures that would significantly impact house prices (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes. So there’s no bubble here in any way, shape or form. The only direction housing prices have to go over the next year or two is up. Once rates come down — even a little — we’re off to the races. Again. Which makes this other statistic from Realtor.com all the more depressing: - “In May, 86% of consumers said it was a bad time to buy a house, up from 79% the previous month.” We’re not saying it isn’t a bad time. Absolutely is. But we just don’t see it getting any better, which presents a near, if not actually impossible conundrum. One solution is to buy in up-and-coming markets. But you have seen what has happened in places such as Austin, Nashville and Portland. They were once up and coming. Now, they’re increasingly unaffordable. Expect the same to happen in places like Buffalo, New York, where, in May, the median number of days on the market was 21 at a median price of $300,000. And that’s across the entire city. In the city’s solid Elmwood Village neighborhood, the median list price was $460,000, up 12.3% year over year. Places like Buffalo are likely to be the next Austin, Nashville or Portland. This only adds to one of the worst housing crises our nation has ever faced. The Bottom Line: If we are indeed turning into a nation of renters — and maybe we’re already there among younger people — at least renting saves you from the unexpected costs of home ownership. Instead of setting aside a few grand every couple of months in case something breaks, you can direct that money to the stock market. This might not be much comfort if you really want to be a homeowner, but it is one potential bright side. If buying a house simply isn’t the right move, it almost always pays — over the long haul, historically — to put your money in the broad stock market. 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