Housing Hubbub (Part 1)

The housing news is mixed, and the market is confused.

Pending home sales for May were down about 15% from a year ago. While that isn’t good, it’s not as bad as it was over the winter, when pending sales were down over 20%.

I’ve said before that housing figures between October and April are no good, but here’s evidence that some of the doomsayers may have a point. Even Janet Yellen, President of the San Francisco Fed, is downbeat on the prospects for a stabilizing housing market.

It seems that tighter credit and significant foreclosures are dampening demand for housing. If that is the case, we may be in for another round of losses in the financial sector.

At the same time, oil prices are back to where they were in May, following reports that Americans didn’t drive as much over the 4th. Seems that $4 gas is a tipping point, and people aren’t on the road as much.

We don’t know the future, but eventually higher prices for oil will reduce demand, and lower housing prices will increase demand. Both of these factors will ultimately help the consumer. The race isn’t always to the swift, but that’s usually the way to bet.

Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-03T20:05:34+00:00 July 9th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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