Our New Website Is Here!
As part of our merger with St. Paul Research, we’ve created a new website that will house all of our collective content under one roof, bringing you a higher level of research and service through our analysts’ combined insight, expertise, and perspective. Go to my.stpaulresearch.com to access our new site.

How Historic Lows in Housing Will Set You Up for Incredible Gains

It’s a crisis!

U.S. home ownership is plummeting. No one’s buying houses anymore. If this trend continues we’ll be a nation of renters in a few years. Goodbye American Dream. It’s just awful.

Actually, that’s just a bunch of B.S.

Today, I’m going to show you how you can actually make money off what many consider to be some grim homeownership statistics. It might even change the way you think about the housing market in the U.S.

So here’s the deal:

Earlier this year, the homeownership rate hit its lowest level since 1989. And now it’s surpassed this “bleak” milestone.

“The seasonally adjusted homeownership rate declined to 63.5%, down from 64.7% in the second quarter of 2014, according to estimates published by the Commerce Department on Tuesday,” The Wall Street Journal reports. “That is the country’s lowest homeownership rate since 1967.”

No, that’s not a typo. Homeownership rates haven’t been this low in 48 years. Take a look for yourself:

Judging by this chart, you probably think I’m mad as a March hare for my bullish views on homebuilder stocks right now. I’ve been yapping about these stocks for the better part of the past year. And right now we’re at a tipping point for the housing market.

So why am I so bullish on housing?

Consider the following:

First, we’re dealing with the tightest real estate market in a very long time. Homebuilders haven’t been building for the past decade. And the rental market? Crazy. Rents are sky-high and the rental market these days is tight as a snare drum. I reminded you back in June that the average rates for rental houses have risen by more than 13%.

That means there’s a ton of demand for housing right now and not enough supply to meet it. That means one thing: supply has to increase. Who’ll provide it? Homebuilders.

To recap:

Rental demand is through the roof and homeownership is at 48-year lows. No wonder building permits are hitting eight-year highs. Did you get that? Building permits are hitting eight-year highs. And while the number of owner households dropped by 400,000, the Wall Street Journal also notes that the number of renter households jumped by 2 million.

That’s household formation at work. Young people are moving out of their parents’ basements and into apartments. We have a boom generation entering the real world—and these kids need places to live.

I’m guessing we won’t be seeing much more of these crazy real estate statistics like the one I showed you just a moment ago. And as homebuilders start ramping up construction on apartment buildings, condos, and single-family homes, you stand to cash in betting that the bottom’s finally here…

Forget what you read about housing. The American Dream is alive and well.

At least for homebuilders…

Greg Guenthner

for The Daily Reckoning

P.S. Is that the sound of a bubble popping? If you want to cash in on the biggest profits this market has to offer, sign up for my Rude Awakening e-letter, for FREE, right here. Stop missing out. Click here now to sign up for FREE.

You May Also Be Interested In:

Heed This Warning…

After last week’s incident at the Capitol, Big Tech names like Amazon, Google and Twitter dominated the headlines with their recent banning frenzy. This morning’s action showed that investors weren’t too happy. Twitter hit a double-digit loss before recovering this morning. We’ll be following this story as more and more info starts to unravel… stay...

Greg Guenthner

Greg Guenthner, CMT, is the editor of Opening Bell Fortunes and Seven Figure Signals. He has been with Agora Financial/Seven Figure Publishing since 2005. In 2019, the average position in Greg’s Sunrise Fortunes portfolio outperformed the S&P 500 by 1.65x.

View More By Greg Guenthner