Lumber futures showing signal of US home price rally in 2008 as Euro Dollar futures signal lower short term rates
Marla Guthrie
Jan. 1, 2008

Lumber futures prices have signaled accurately a rally in real estate prices in US in the past. The commercial interests in lumber futures manifests hidden demand. There is more than 60% chance of a stabilization of home prices in early 2008 and a sharp bear rally by the middle of 2008. The rally is just a mid term correction within a multi-decade real estate bear market.

Anyway, it seems a stabilization of the real estate market is in the happening. Fed is planning to cut interests rates further as apparent from the three and six month Eurodollar futures. The short terms rates will be lowered significantly in the first half of 2008. That will not only help stabilize the real estate market but also actually create a bullish scenario. The gold price is signaling an inflationary rate cut.

Combine the lumber futures commercial interests, the bearishness in residential real estate market, and the probable lower rates you can sense that real estate is about to rally. Real estate market cycles are larger compared to that of stocks or commodities. The market rally in real estate can be years long.

Sales of existing homes in the U.S. unexpectedly rose in November, fueled by slumping house prices that signal no respite from the three-year housing recession. This just confirms the scenario we are presenting.

If you are planning to buy a home for your primary residence in the next eighteen months, it may be the right time to buy it now.

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Lumber futures showing signal of US home price rally in 2008 as Euro Dollar futures signal lower short term rates
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Combine the lumber futures commercial interests, the bearishness in the residential real estate market, and the probable lower rates you can sense that real estate is about to rally.
READ MORE>>

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