It's time for the Fast Money market midterm. Our topic is the housing market. Hope you studied because this one could be ugly!
A Harvard study this week suggests the worst housing slump since WWII might find a way to get worse. Not possible, you answer. Afraid so. After a 16 percent plummet in home prices since the 2006 peak, buyers are afraid to step in until prices stop tumbling.
Is there any hope for this housing house of cards?
I think there is hope, says Guy Adami. The rate of decline in prices had been slowing and if that trend continues it will be a good thing. Also new housing starts are around the 1 million mark. In the last 35 years when new housing starts hit that level, it typically signals the bottom of the cycles.
For those of you who are high risk traders, you might want to dip your toe in Centex , DR Horton , KB Homes or Toll Brothers , Adami counsels.
If you’re going to play housing stay away from those with a lot of debt, adds Karen Finerman. Of the names mentioned above Centex is the least levered.
Time to take our Market Midterm. Tell us what you think!