Despite what you read in the financial press, the U.S. housing market is strong.
So when you see headlines like this, just ignore them.
There’s nothing wrong with the U.S. housing market.
In fact, it’s probably in its best shape ever.
But before we go on, welcome to Cycles Trading with me, Phil Anderson. My aim with this three-day-per-week e-letter is to introduce you to the most powerful knowledge for building wealth. That is, learning the importance of the 18.6-year real estate cycle and understanding its key relationship to stocks.
The fact is that no one else studies the market like this.
Most people are either “real estate people” or “stock people.” Very few are both. But by only looking at half the story, more often than not, they miss what’s really moving the market, and therefore miss the opportunity to profit from those moves.
By regularly tuning into this e-letter, we’ll help you understand the full story and show you how to make the most of any market.
Mortgage Delinquency Rates Are at Historic Lows
Put simply, people have no problems paying off their mortgages.
Even despite higher interest rates, mortgage delinquencies in the U.S. are at historic lows.
CoreLogic, a housing data provider, says:
Overall mortgage delinquency and foreclosure rates remained near record lows in November 2022, 2.9% and 0.3%, respectively.
Long-term numbers from the Federal Reserve confirm this.
Delinquency rates haven’t been this low for about 20 years.
What does this tell me?
That the housing market is doing well and will continue doing so in the coming years.
The strong U.S. consumer can not only make their mortgage payments but also withstand a potential recession.
Here’s something that the mainstream press misses…
And this is one of the reasons why we will not see a recession.
Homeowners have accumulated almost $30 trillion in home equity in the United States.
This is a record amount, and it will help U.S. families avoid financial hardship if the economy dips.
On average, a U.S. household has about $300,000 in home equity. This is a massive cushion against any financial shock.
U.S. households will remain in fantastic financial shape, in other words.
This is why the property market is firing on all cylinders. For Miami, 2022 was a remarkable year. It was the second-biggest year in the history of Miami-Dade county, with 86 sales per day on average.
The Miami market is so hot that there are only 2.6 months of housing supply available. (In a balanced market, there would be about six months of supply.)
This is proof the U.S. housing market is in great shape. Mortgage buyers are financially strong, they have a lot of equity to rely on, and some of the country’s markets are seeing record sales.
The cycle isn’t over yet…
Regards,
Phil Anderson
Editor, Cycles Trading with Phil Anderson