XLRE - Real Estate is going to underperform.
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XLRE is the Real Estate ETF. I'm a residential builder and my wife is a realtor, so I have my finger on the pulse of this ETF and XHB in particular. I can tell you for certain it's toppling over the edge in the real world... and the head and shoulders chart pattern here confirms it's doing the same in market-land.
Mortgage rates spiraling at a rate not seen in decades....and it's going to result in a very significant slowdown/correction in the housing industry. I am not calling for a crash like '08, mind you, but the rate hikes are going to price a LOT of people out of the market entirely. We are just now beginning to see inventory rise and that's the first "leg" on the way down in the real world. The end result is sellers finally realizing the days of having 20 offers within a day are done, and buyers regaining control. This will result in a significant downward pressure being placed on the entire industry.
Mortgage rates spiraling at a rate not seen in decades....and it's going to result in a very significant slowdown/correction in the housing industry. I am not calling for a crash like '08, mind you, but the rate hikes are going to price a LOT of people out of the market entirely. We are just now beginning to see inventory rise and that's the first "leg" on the way down in the real world. The end result is sellers finally realizing the days of having 20 offers within a day are done, and buyers regaining control. This will result in a significant downward pressure being placed on the entire industry.
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I just pulled all my shorts because I think a pretty decent bounce is going to happen. It started yesterday in the small growth stocks that had gotten annihilated to that point and today it spilled over to the rest of the market. I expect this to continue until the Fed minutes are released from the last meeting.
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