With Income And Home Price Headwind, Hitherto-Housing Tailwind Rates Need Close Watch

posted in: Credit, Economy | 0

Rates are rising – probably not enough to seriously hurt sectors such as housing, but will in due course if the momentum continues. In merely nine sessions, 10-year Treasury yields have gone up by 24 basis points to 2.28 percent, … Continued

Covering ITB Short – For Now

posted in: Economy, Equities, Technicals | 0

Next week brings three important housing-related data points: the NAHB/Wells Fargo housing market index (September), existing home sales (August), and housing starts (August). In July, starts rose 2.1 percent month-over-month to a seasonally adjusted annual rate of 1.21 million units, … Continued

Sales Of New And Existing Homes Break Out – Genuine Or False?

posted in: Economy | 0

There probably is an air of excitement among U.S. housing bulls – particularly the technically oriented ones.  Sales of both new and existing homes have broken out of recent ranges. In June, new homes rose 3.5 percent month-over-month to a … Continued

ITB Rallies 14% In 2 Weeks For Range Breakout, Gives Out Signs Of Fatigue

posted in: Economy, Equities, Technicals | 0

Next week’s economic calendar is housing-heavy. Monday brings the NAHB/Wells Fargo housing market index for July, Tuesday housing starts for June, and Thursday existing home sales for June. Builder sentiment remained stuck at 58 for four months through May, before … Continued

Deceleration In Home Price Appreciation To Reverberate Through Consumer Spending

posted in: Economy | 0

The S&P/Case-Shiller U.S. national home price index advanced 5.2 percent year-over-year in October.  This was the fastest growth since July last year.  However, annual price appreciation has been decelerating since peaking at 10.9 percent two years ago. The October 2013 … Continued

Of Late, ITB Not Taking Cue From Builder Sentiment, Rather Other Housing Data

Directionally, ITB, the iShares Dow Jones Home Construction ETF, and U.S. homebuilder sentiment tend to move together.  The correlation coefficient is far from perfect, but at 0.68 between May 2006 and November 2015, it is decent (Chart 1). The National … Continued

U.S. Housing Has Spring In Step, But Risks Tripping Over Rapid Price Rise

posted in: Credit, Derivatives, Economy, Equities | 0

Relatively speaking, U.S. housing is going strong, with price being the major risk. Monthly data tend to be volatile.  At a seasonally adjusted annual rate in August, sales of existing homes dropped 4.8 percent month-over-month to 5.31 million units, even … Continued

June Softness In New Home Sales Preceded By Price Surge — Similar Fate Awaiting Existing Homes?

posted in: Economy | 0

There is a dichotomy between U.S. sales of new and existing homes.  This has been preceded by a dichotomy between how their median prices were diverging from each other. June saw existing homes jump to a seasonally adjusted annual rate … Continued

Weekly Short Put On ITB (iShares Home Construction ETF) After Assignment Of Naked Call Write

The July 2nd ITB 27.50 naked calls hypothetically written on June 24 ended up in the money by six cents.  The ETF closed at $27.56 last Thursday.  Calls were sold for $0.38, so, after assignment, it is now an effective … Continued