Tags: Plunging | Housing | Starts | Means | Boom | Over

Plunging Housing Starts Means Boom Is Over

Tuesday, 19 April 2005 12:00 AM



The department reported that housing starts plunged 17.6% in March, their steepest drop in more than 14 years.

Blaylock

Permits for future groundbreaking - an indicator of builder confidence - also fell more than expected, plunging 4%, Reuters reports.

Blaylock

Months ago, we detailed Sir John Templeton's view that residential real estate in some parts of the United States could crash by as much as 50% in price.

But the immediate cause is the spike in interest rates.

We recently spoke to a major mortgage broker in South Florida's red-hot real-estate market. He tells us business is actually booming despite the rate rise.

People, he says, are "panicking," thinking they need to move now on a property to lock in the lower rates before they rise more, as expected.

There is little alternative. As we have predicted in Financial Intelligence Report, the U.S. government is in a bind.

Foreigners were just not willing to buy our debt.

But that's where the law of unintended consequences kicks in.

ARMs account for about one-third of all mortgages. And these holders will be in for a rude awakening as the adjustable rate kicks up from the gimmick rates of 1 to 2%.

Some thoughts gleaned from various editions of Financial Intelligence Report, edited by Jarret Wollstein:

To read this report, Go Here Now.

For more info, Go Here Now.

For more info, Go Here Now.

Some real estate, especially the commercial variety in certain areas of the country, will continue to do well despite the residential housing fall-off. Focus on REITs that invest in these areas.

Great opportunities continue to exist in foreign currencies and global equity plays.

Gold is not an investment - it's insurance. You need it in the age of 9/11. It will not be a losing investment, as it will serve as a great hedge against inflation and U.S. economic woes.

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The department reported that housing starts plunged 17.6% in March, their steepest drop in more than 14 years. Permits for future groundbreaking - an indicator of builder confidence - also fell more than expected, plunging 4%, Reuters reports. ...
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2005-00-19
Tuesday, 19 April 2005 12:00 AM
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