What is S&P 500 Homebuilders pricing in?
I last week posed the question “Is real estate rolling over?” in a post including fairly bearish commentary from Robert Cambell’s Campbell Real Estate Timing Letter. I also included a chart of the SPDR S&P Homebuilders ETF – ticking all the boxes of a cyclical bull market – and pondered on whether the stock market was getting it wrong.
Here is the chart again:
David Rosenberg, chief economist and strategist of Gluskin Shedff & Associates, provides more food for thought, stating that his regression analyses show the Homebuilders Index to be pricing in the following:
• Housing starts: pricing in a level of 800-900k (versus 575k currently)
• Existing home sales: pricing in a level of 5,500k (versus 5,050k)
• NAHB Housing Market Index: pricing in a level of 35 versus 15 actual.
Is this the most expensive part of the US stock market?
More on this topic (What's this?)
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