http://www.investmentcontrarians.com/stock-market/why-the-housing-market-is-home-sweet-home/1267/ It was extremely difficult times for homeowners following the subprime mortgage implosion that helped to drag down the global economy in 2008. I recall how easy it was to get a mortgage without even having to provide an income or work history to the lenders.

1. http://www.investmentcontrarians.com/stock-market/why-the-
housing-market-is-home-sweet-home/1267/
Is the Housing Market “Home Sweet
Home?”
By George Leong for Investment Contrarians | Jan 21, 2013
It was extremely difficult times for homeowners following the subprime mortgage
implosion that helped to drag down the global economy in 2008. I recall how easy it was
to get a mortgage without even having to provide an income or work history to the
lenders. When an entry-level worker at McDonalds Corporation (NYSE/MCD) can get a
mortgage with no questions asked, you have to wonder how long it might be before a
housing bubble surfaces.
Luckily, after several years of the housing market being dragged through the mud, the
current situation has vastly improved to the point where housing stocks are hot.
The declining mortgage rates have helped. The $40.0 billion in mortgage-buying by the
Federal Reserve each month has driven down the cost of interest rates to record lows.
More people are working now, and with the jobs picture improving (albeit, at a slow
pace), I expect the housing market will continue to strengthen.
Wherever you live, it’s clear the housing market is displaying much-improved industry
metrics. We just saw another strong housing starts and building permits reading.
In December, there were an impressive 954,000 annualized starts, which is above the
Briefing.com estimate of 880,000 and November’s 851,000.

2. http://www.investmentcontrarians.com/stock-market/why-the-
housing-market-is-home-sweet-home/1267/
Also lending support to the housing market recovery was a strong building permits
reading of 903,000 in December, beating the Briefing.com estimate of 880,000 and
September’s 900,000. The strong reading indicates that builders are expecting a good
flow of buying in the housing market, and this could only bode well for homebuilder
stocks.
Home prices, representing another key piece of the housing market, are edging higher,
with the S&P/Case-Shiller U.S. Home Price Index, comprising the 20 largest U.S.
metropolitan cites, increasing a better-than-expected 4.3% in October; this number
represents the ninth straight up month for home prices. When prices rise, I expect more
spending by homeowners due to the subsequent rise in wealth.
The improvement in the housing market is also showing up in the results of numerous
homebuilder stocks.
Technical analysis of the S&P Homebuilders Select Industry Index (NYSEArca/XHB)
chart below shows its upward trend from its October 2011 bottom to its current high. The
upward break around the $22.00-level was bullish due to the topping action that was
evident.

3. Chart courtesy of www.StockCharts.com
The NAHB Housing Market Index reported a strong reading of 47 in December, in line
with the Briefing.com estimate and the Index’s reading in November. What is interesting
is that the reading is approaching the 50-level, not reached since April 2006, over six
years ago.
I expect housing to continue to improve, especially if the jobs market improves.
At this juncture, if you hold some of the hot homebuilder stocks, I would be taking some
money off of the table after the run-up in the housing market stocks.
http://www.investmentcontrarians.com/stock-market/why-the-
housing-market-is-home-sweet-home/1267/