Wall Street Strategies
Login:  
Password:
  remember me
Sign Up | Lost Password
Existing Home Sales Rebound

12/22/2016
By Charles Payne, CEO & Principal Analyst

The news didn’t move the needle for the broad market, but make no mistake; the existing home sales report is not only impressive, but it’s also (in my mind) a harbinger of things to come. This is based on several factors such as  pent-up demand and a greater ability to buy homes when certain parts of The Dodd-Frank Act are removed, including the so-called “ability to pay” rule that’s ostensibly in place to make sure people didn’t buy homes they couldn’t afford; instead, it only limits the dream of home ownership. 

(I’ll get to the notion of jettisoning Obama’s regulations in a moment.)

Yesterday, sales of existing homes came in at an annual rate of 5.6 million, the highest since February 2007.  It was driven by a 10% surge in condos while single-family homes edged slightly lower.

Several of my favorite names moved on this news, and the potential for the housing market to spring back to life in 2017:

  • Toll Brothers (TOL) +0.6%
  • Sherwin-Williams (SHW) +1.9%
  • Whirlpool (WHR) +1.8%

The one-two punch for next year is shedding regulations and making it easier to get home loans as mortgage rates move higher; there is no doubt that would-be buyers, especially young first-time buyers, need all the help they can get.

Key Year- to -Year Trends

  • First-time buyers: 32% from 30%
  • On market: 43 days from 54 days
  • 30- Year fixed rate: 3.77 from 3.85 (average in 2015)

‘Home Sweet Home’ could become the renewed American Dream next year, and that would add serious fuel to the underbelly of the economy.

After the close on Wednesday, Bed Bath & beyond (BBBY) missed and gave lower guidance while Micron Tech (MU) beat and posted a strong guidance. 

Perhaps more important is the announcement that Wall Street dealmaker Carl Icahn will be a special adviser to President-elect Donald Trump and his transitional team on the matters concerning regulatory reform. 

Cutting Those Regulations Down to Size

Even as he spies the exits, President Obama is dropping new regulations and executive orders like carpet bombs, and it’s going to be a major problem for the new administration and the economy. This year, the Obama administration layered up so many new regulations that the total number of pages broke the old record.  According to the office of Senator John McCain, Obama’s regulations have cost the economy $350.0 billion.

Federal Regulation Pages

Year

Total

2016

81,640

2010

81,405

2011

81,247

2015

80,260

2008

79,435

2013

79,435

2012

78,941

The only folks that can game the system and find loopholes as well as Washington are the master investors of Wall Street, whose sole goal is to find ways to crack the code and create value.  Coupled with Wilbur Ross at Commerce, Carl Icahn will be a boon for taxpayers and a pain for industries doing business with the United States.

Lots of money will be made, but the fat heretofore marbled into the system is about to be pulled out.

Charles Payne
Wall Street Strategies


 

Add a Comment!

Name:
Email:
Comment:
 
 
Submitted comments are subject to moderation before posting.
Charles Payne is featured on the Fox Business Network Monday-Friday at 6 PM ET on "Making Money with Charles Payne".

Charles Payne

FREE commentary in your Inbox! Click here
No credit card is needed.

The WStreet Market Commentary delivers the daily unbiased insight and guidance of Charles Payne and the Wall Street Strategies Research Desk.

The daily commentary takes a common sense look at the big picture, gives you advice on sector rotation and trends and helps you determine how news may affect your portfolio. We forecast what the future drivers of the market will be by interpreting the fundamental, technical, and behavioral aspects of the market.

From time to time, the commentary includes free stock picks and trading strategies to help you make money and maintain financial and mental balance in the stock market. The commentary is delivered twice a day, in the morning and afternoon, keeping you informed at pivotal times and frequently includes analysis of the major indices and actionable analysis of individual issues.

Take control of your future starting today. Simply click here to create your account.

Home | Products & Services | Education | In The Media | Help | About Us |
Disclaimer | Updated Privacy Policy | Terms of Use |
All Rights Reserved.