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The housing market’s a mess right now — there’s no sugarcoating it…
And whenever you see politicians rolling out sweeping plans with bold promises, that’s your cue to get skeptical. Really skeptical.
These plans are designed to get headlines and votes, but there’s probably not a real way these are going to make housing affordable to the average person.
Despite skepticism, the government’s $200 billion push indicates a commitment to maintaining market liquidity. So while the political theater plays out, I’m focused on something more useful: The four specific ways savvy traders can actually profit from this situation.
Here’s the reality — the government’s plans are mostly smoke and mirrors. But that doesn’t mean there aren’t opportunities.
You just need to look past the noise and focus on what actually moves markets.
The Builders and the Landlords
Let’s start with the obvious: The only real solution to a housing shortage is to build more houses. It’s not complicated.
Homebuilder stocks like Lennar (LEN), Toll Brothers (TOL), D.R. Horton (DHI) and PulteGroup (PHM) are offering things like mortgage rate buydowns to lure in buyers and they’re gaining market share.
These companies are actively gaining market share by offering mortgage rate buydowns. They’re the ones selling the shovels in this gold rush. Lennar and PulteGroup in particular are in a prime position.
Now for the landlords — and this is where things get interesting. The big single-family rental REITs like Invitation Homes (INVH) and American Homes 4 Rent (AMH) got punished, maybe unfairly. There was fear around potential bans on corporate homeownership and it caused some panic selling.
In reality, they own a small fraction of single-family homes, between 0.5% and 3%.
But here’s the thing: If you believe this ban is mostly for show and that the actual rental market for single-family homes is still a solid play, well, you just got a sale courtesy of President Trump.
Despite affordability issues, rental demand remains strong.
The Mortgage Plays and the Hedge
Next up are the mortgage middlemen — the companies that invest in mortgage debt.
The government’s $200 billion push might be mostly priced in, but it shows a commitment to keeping the mortgage market moving and liquid.
Look at iShares Mortgage Real Estate ETF (REM) for broad exposure here.
And finally, there’s the alternative play. You could try to play rates directly, but that’s sketchy. It’s a hard way to trade.
You could play the rates with the banks or maybe gold — as we pump more money and more liquidity into the system, gold keeps ripping.
That’s your fourth pillar.
Look, the housing market is a complex problem with no easy answer. Don’t bank on a government bailout for your dream home. Instead, be the savvy trader.
Understand the difference between political theater and market realities and look for the opportunities that fear and hype create.
Cash is still king, especially on dips like we’re seeing right now.
Stay sharp out there.
Jeffry Turnmire
Jeffry Turnmire Trading
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I’m just a regular dude in Knoxville, Tennessee: a husband, father, civil engineer, urban farmer, maker and trader.
I’ve been at this trading thing with real money for 20-plus years, and started paper trading over 35 years ago. I have a knack for making some epic predictions that just may very well come true. Why share them? Because I like helping other people — it’s the Eagle Scout in me.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
