PulteGroup, Inc. (PHM), The Blackstone Group L.P. (BX), Colony Financial Inc (CLNY) & The Housing Rebound: It’s Not What You Think

The numbers tell the tale
Even those pleasing housing numbers from the government aren’t all they seem. Of the 1,036,000 housing starts reported for last month, only 619,000 were single-family homes. By comparison, 392,000 — more than half — were multi-families, destined to contain more than five units each.

Doubtless, these apartments will be occupied by young people who are increasingly forming their own households, to the tune of 1.1 million in 2011. Unfortunately, the doubling of the lethargic household formation rates of the 2008 to 2010 recession years hasn’t helped housing — even this Reuters article on the subject notes that most of these persons are moving into rent. With the rates of crippling student loan debt faced by many college graduates these days, buying into the housing market doesn’t seem likely any time soon.

Will the housing market collapse as soon as investors decide that prices have risen too much for their taste, and they exit the market en masse? Perhaps. Another concern is that the non-investors currently participating in the housing market because of ultra-low interest rates, courtesy of Federal Reserve policy, will also drop out if interest rates begin to climb. Unfortunately for the housing sector, the components of the current revival don’t appear to be the ingredients for long-term success.

The article The Housing Rebound: It’s Not What You Think originally appeared on Fool.com.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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