The Housing Sector Is Waving A Red Flag

“Looks like we are done swimming for the day,” my son said as the lifeguard put up two red flags to tell everyone the beach was closed. “Why did they close the beach?”

As we were walking back from the beach, I explained that the lifeguard had spotted a shark in the area. My son replied that lifeguards are one of the reasons he likes coming to the beach. “They can warn us when sharks are around.”

This wasn’t our normal routine, as we usually frequent an area of the beach with no lifeguards. This means a lot fewer people, affording us our own “private” beach, without the costs.

But, as my son pointed out, we take risks by not having a lifeguard around to tell us when danger is near.

Right now, consider me your lifeguard in this turbulent market, waving red flags to warn you that one section of our economy could be quite dangerous for investors… 

The housing market.

Recent economic data from the housing sector have been waving warning signs recently, depicting a weak housing environment — one we can possibly even benefit from.

In order to see this weakness ahead of time, you have to pay close attention to leading economic indicators — those that contain actionable information by foreshadowing the housing market months or years in advance.

Right now, the housing market seems to be firing on all cylinders if you follow existing-home sales data. March existing sales rose 5.1%. But, then, this is a lagging indicator, pointing toward prior performance.

Leading indicators paint a completely different picture for the housing market, telling us that March’s strength won’t last long. And we can use this leading information to make one simple trade to take advantage of the situation.

You Can Lead a House to Profit

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Disclosure: Unique income strategies are your best bet at generating consistent, stable income in this environment. Strategies like the ones I utilize each week ...

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