Watch Out Below! The Housing Market Is Tumbling at the Worst Possible Moment

Two new reports suggest that the housing recovery is faltering.

Apr 27, 2014 at 11:45AM


While it's no secret the housing market has been struggling, it wasn't until this week that we discovered just how dire the situation has become.

On Tuesday, the National Association of Realtors reported that existing home sales, which account for roughly 90% of the American housing market, fell in March for the seventh time in eight months. At a seasonally adjusted annual rate of 4.59 million sales, they were 0.2% below February and a disturbing 7.5% under the same month last year.

"There really should be stronger levels of home sales given our population growth," said NAR's chief economist Lawrence Yun. "In contrast, price growth is rising faster than historical norms because of inventory shortages."


To add insult to injury, the U.S. Census Bureau announced on Wednesday that new homes sales are in freefall as well. Sales of new single-family houses in March were at a seasonally adjusted annual rate of 384,000. This was 14.5% below the February rate and 13.3% less than the March 2013 estimate of 443,000.

As The Wall Street Journal pointed out, last month's figure was the lowest annual pace since July of 2013 and was far below economists' expectations. The consensus forecast called for a seasonally adjusted annual rate of 450,000.


Just to be clear, it's not surprising that both new and existing home sales were down in March, as we've gotten numerous indications of lackluster activity over the last few months. Among others, data from the Mortgage Bankers Association shows that mortgage application volumes fell out of bed after interest rates began rising last year, and mortgage originations recently plunged by 66% at the nation's four largest banks compared to the year-ago period.

What is shocking, however, is just how steep the decline in homes sales has turned out to be. This is particularly the case when you consider that we're on the cusp of the prime selling season -- that is, when these figures should be heading up.

Is this something to be concerned about? If you own stock in banks or homebuilders, then the answer to this is clearly yes. If not, it probably won't make a huge difference unless you're thinking about getting into the housing market yourself this summer. But either way, these are critical trends that every investor and analyst needs to keep their eyes on.

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4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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