Quote:
Originally Posted by 2000cs
... One example: Pg 10 ignores the impact on housing demand of removing illegal immigrants. A housing price decline seems more likely, especially in cities. Mortgage rates already have ticked down a bit. If the FED cuts rates as Barron’s anticipates, mortgage rates will fall further, affordability thus improves.
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Sounds like an opportunity to invest in the homebuilder segment, if you think that scenario will outweigh the negatives. Homebuilders were weak in 2024, and even weaker YTD. I have no idea how many illegal aliens are homebuyers. I have heard they tend to not utilize traditional mortgage loans.
I don't know that Barron's is 'anticipating' FED rate cuts. That info iusually comes from CME Fedwatch. And is based on weakening economic indicators. Regardless of what mortgage rates do (and lower mortgage rates often coincide with higher housing prices), the impact of higher lumber, drywall and concrete prices, along with difficulty procuring labor is likely to result in upward pressure on new home construction prices. Which is what Barron's was referring to in that paragraph. Loss of GSE status may counteract lower FED funds rates, however.