Gundlach pokes holes in housing recovery at Sohn

|By:, SA News Editor

"Single-family housing is over-believed and overrated," says Jeff Gundlach at the Ira Sohn Conference. What strength there is or was in housing, he says, came from all-cash transactions (much of it institutional money). "This is not exactly indicative of the organic growth in the market from a real buyer’s perspective.”

New homes sales: "Remarkably weak ... flat on their back just as they were at the depths of the recession."

Affordability: If it's so great, why did last year's interest rate rise hit sales in such a large way?

Wind down of the GSEs: Who knows how this plays out, but it's almost certainly going to result in higher mortgage rates.

"The kids are not alright," he says, and the exit of first-time home buyers is a secular trend thanks to high unemployment and high student debt levels. "Young people were shocked and scarred by the financial crisis ... [renting is] massively  more appealing."

Related ETFs: XHB, ITB, PKB

Earlier Sohn coverage