I have some funds tied up in investments backing the housing market in the US. I am worried about the lackluster performance over this last couple months and wonder if anybody else is getting jitters over the US market performance. As interest rates have slowly risen the April numbers for the housing index from NAH (National Association of Homebuilders) is at it's lowest in five years.

Time to pull out?

Ah Toucan - the million dollar question (no pun intended). If I could tell you that, I'd be a rich person - and I am certainly not that. The crazy thing about the markets is what you think should happen , the opposite often happens. Contrarian theory. But I'm not telling you to hold either. I have no idea. How's that for advice?

I like Belson's comments. Never a wiser thing said.

Tomorrow the Commerce Department reports new home sales for March, which indicates whether increasing mortgage rates have affected housing demand.

http://biz.yahoo.com/ap/060426/economy.html?.v=12
New home sales rose but median price fell slightly. Thoughts?

New home sales rose while sales of preexisting homes was slightly down. My take on this is there will be an inventory glut soon and home values will be dropping. Many folks like myself are mindful of getting out before the bottom falls out and that will accelerate the process of declining values.

I'm out.

Now add the fact that Bernanke said that another interest rate hik may be needed soon....Not good news for an already slumping housing market.

I can only hope we'll see similar in the UK. Go inflation!

I really don't think we'll ever see inflationary periods like we did 20 - 30 years ago. Some maybe? Sure. But technology is so good right now - any new product idea immediatey has a million competitors offering their goods and services more efficiently and lower prices.

My personal take on the US housing market is it still has some play left in it. While interest rates are moving up for the first time in forever, I still think there is a bit of room until this thing falls out. I think California is always on the forefront of the US housing market and the market there is out-of-control. As out-of-control as it is, I still think there is a little more room for growth. I would just stay away from the high-end markets like California (Northern and Southern), and the upper North East areas. i think this are going to pop first and if you have investments in other parts of the country you are going to have enough time to get out before the rest of the dominoes fall down.

Argh, a long post just got erased by my foolishness. Let me see if I can re-create it.

Even with interest rates going up in the US for the first time in a long time, I think there is still a bit of room for growth in the US market. I think part of it is that the market has the entire built-up mortgage industry propping it up, which is really something new in the history of the housing markets facing a collapse. I think they will provide a few extra months of support before things tail off.

I think the biggest area of concern is California. They are always on the leading edge of the US housing market, both boom and collapse. Currently California real estate is out-of-control, but I still think there is a little play left there before things fall apart.

The good news is if you are looking at housing outside of California and the upper-crust North East that you are going to have time to get out before things fall apart. Watch California and when the bottom drops you will still have time to make a move elsewhere. if I were heavily vested in California housing right now, I would seriously be considering moving to something else.

I think 3-6 months is still a good window before things really go down.

EEk...Brian.
But with the inflation will come the inevitable DEFLATION. In which yours truly has managed to get a bit caught up in. Not to fear, this should not last more than a few years. Right????

Okay, I'm a homeowner now. Go house prices! Boo inflation!!

One thing that I have learned is that one should never trust what comes out of a politician’s mouth..in fact..run in the opposite direction!