| New Home Sales 'Soaring' and 'Surging,' With More Gains to Come | | By Dr. Steve Sjuggerud | | Tuesday, October 31, 2017 |
| "U.S. New Home Sales Soar to Highest Level in a Decade," USA Today reported last week.
"New Homes Sales Growth Surges to 25-Year High," the Wall Street Journal said.
So which is it? Are new-home sales the highest they've been in a decade... or in 25 years?
It turns out, the answer is BOTH...
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| Sjug's 'Melt Up' Redo
Dr. Steve Sjuggerud just made a major announcement at our annual conference in Las Vegas. "Porter is definitely NOT going to like this," he said. To see his big announcement, click here. |
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The number of new homes sold last month reached 667,000 – the highest level since October 2007, a decade ago, during the last housing boom.
Looked at another way, though, new-home sales jumped by 18.9% – the highest monthly sales growth in 25 years.
Why did so many new homes sell last month? The hurricanes likely played a part.
But to me, the big factor in the housing market is the low supply of existing homes for sale.
It's Economics 101 – when you have no supply and a ton of demand, prices go higher.
Specifically, housing supply is measured in months – that is, how long it will take for the existing inventory of houses to sell at the existing rate of sales. Right now, we're sitting at 4.2 months of supply.
It is rarely lower than this... In fact, over the last 20 years, it was significantly lower only once – in early 2005. That was during the final years of the last great housing boom in the U.S... And house prices REALLY soared after that.
I expect the low supply today will create a similar effect – dramatically higher home prices.
The average sale price of new homes hit an all-time record last month, at $385,200. The median price for new homes was $319,700.
Keep in mind, new homes are only a fraction of the housing market. And the average home price is always higher than the median home price... For comparison, the median price of existing homes sold last month was $246,800.
But with scarce supply, that means we have plenty of upside ahead.
Higher house prices have been part of my big theme for the last eight years... Since then, I have said:
| Interest rates will stay lower than you can imagine, for longer than you can imagine... And that will push asset prices, like stocks and real estate, higher than you can imagine. |
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The "Melt Up" is arriving in stocks, driving stock prices to new heights as the bull market enters its final phase. And now, the boom time is arriving in the housing market, too...
I believe we still have plenty of upside potential ahead You haven't missed it yet in housing.
Good investing,
Steve
Editor's note: Steve just recommended a "one click" way to profit from this trend in his True Wealth advisory. This investment lets you own a stake in tens of thousands of rental homes – in some of the best markets across the U.S. Better yet, more than 25% of this real estate is in Florida, where Steve is most bullish today. To learn more about True Wealth – and how to access this recommendation – click here. |
THE RETAIL 'OLD GUARD' IS IN TROUBLE
Today's chart highlights more problems in retail... Regular readers know that people aren't shopping the way they used to... Mall traffic is steadily declining as online shopping grows. We've seen this big trend at work with companies like mall operator Tanger Factory Outlet Centers (SKT), jewelry store Signet Jewelers (SIG), and even auto-parts retailer Advance Auto Parts (AAP). Today, we see it in one of the "old guard"... JC Penney (JCP) is one of the oldest department stores in the U.S. It has been in business for more than a century, with about 875 stores across the U.S. and Puerto Rico. But its business is dwindling... Earlier this year, JC Penney announced plans to close 138 stores. And last week, it reported a big quarterly loss and a reduced sales forecast for the rest of the year. On Friday, the stock tumbled nearly 15% on the news. Shares are down more than 70% from their December peak and are now trading at a new 52-week low. It's looking less and less likely that JC Penney will survive another century in retail... |
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| Nobody's Throwing Rose Petals at My Feet | | By Dr. Steve Sjuggerud | | Monday, October 30, 2017 |
| | "When folks are throwing rose petals at my feet, and I'm too busy to return your phone call, that's my ultimate sell indicator." |
| | A Lottery That No One Wants to Win | | By Porter Stansberry | | Saturday, October 28, 2017 |
| | I fear we may be among the only people in America who know what's about to happen... and why it can't be stopped. |
| | Here's Why I Hope You Miss the Boat... | | By Ben Morris | | Friday, October 27, 2017 |
| | It's going to happen. And it's going to be frustrating... |
| | Investors Just Bailed on These Stocks – We're In! | | By Dr. Steve Sjuggerud | | Thursday, October 26, 2017 |
| | For maximum returns on my long-term investments – the ones I'll be holding long after the Melt Up – I don't want to buy what's loved. I want to buy what's "hated"... |
| | Is This Common Investor Bias Costing You a Fortune Today? | | By Kim Iskyan | | Wednesday, October 25, 2017 |
| | You don't have to look far to find financial luminaries and talking heads declaring the death of bitcoin... |
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