I last week posed the question “Is real estate rolling over?” in a post including fairly bearish commentary from Robert Cambell’s Campbell Real Estate Timing Letter.  I also included a chart of the SPDR S&P Homebuilders ETF – ticking all the boxes of a cyclical bull market – and pondered on whether the stock market was getting it wrong.

Here is the chart again:


Source: StockCharts.com

David Rosenberg, chief economist and strategist of Gluskin Shedff & Associates, provides more food for thought, stating that his regression analyses show the Homebuilders Index to be pricing in the following:

• Housing starts: pricing in a level of 800-900k (versus 575k currently)

• Existing home sales: pricing in a level of 5,500k (versus 5,050k)

• NAHB Housing Market Index: pricing in a level of 35 versus 15 actual.

Is this the most expensive part of the US stock market?

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