Tags: Gundlach | Fink | Zell | housing

Gundlach, Fink, Zell Bearish on Housing

By    |   Friday, 23 May 2014 09:14 AM

Investment stalwarts Jeffrey Gundlach, Laurence Fink and Sam Zell have recently expressed pessimism toward the housing industry.

Gundlach is CEO of DoubleLine Capital, Fink is CEO of BlackRock, the world's biggest money manager, and Zell is chairman of Equity Group Investments.

At an investment conference earlier this month, Gundlach recommended shorting homebuilders stocks and said he is shorting the SPDR S&P Homebuilders exchange-traded fund, MarketWatch reported.

Editor’s Note:
5 Shocking Reasons the Dow Will Hit 60,000

One major problem is that young people aren't buying homes, thanks to their precarious job prospects, Gundlach said. "Home ownership for all age brackets is back to where it was in 1995. Meanwhile, the kids aren't alright."

Meanwhile, Fink said at an investment conference this week that the U.S. housing industry is "structurally more unsound" today than before the 2008-09 financial crisis, because it depends more on government-backed mortgage companies Fannie Mae and Freddie Mac, according to Bloomberg.

As for Zell, he said at an investment conference last month that the U.S. homeownership rate might plunge as low as 55 percent, as more Americans opt for renting, Bloomberg noted. That's because they're putting off marriage and having children, he explained.

The homeownership rate stood at 64.8 percent in the first quarter, the lowest in almost 19 years.

Some economists turned a little more enthusiastic toward the housing market after Thursday's news that existing home sales rose 1.3 percent in April, the first increase this year.

"This report provides the first crucial sign that the housing recovery may be on the verge of a rebound," Millan Mulraine, deputy chief economist at TD Securities, told Reuters.

"The biggest story to come out of this report is the boost in home inventory, which has been one of the key issues holding back both buyers and sellers in the first part of this year," said Bill Banfield, vice president of Quicken Loans.

The month's supply of existing homes increased to 5.9 months, the highest level since August 2012, from 5.1 months in March.

Editor’s Note: 5 Shocking Reasons the Dow Will Hit 60,000

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Investment stalwarts Jeffrey Gundlach, Laurence Fink and Sam Zell have recently expressed pessimism toward the housing industry.
Gundlach, Fink, Zell, housing
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2014-14-23
Friday, 23 May 2014 09:14 AM
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