Several signs have emerged that the housing market has bottomed, and major hedge funds are acting on those signals by loading up on housing-related investments.
The group includes Caxton Associates, SAC Capital Advisors, Avenue Capital, and Blackstone Group, The Wall Street Journal reports.
In addition, research firm Zelman & Associates, which formerly held a negative view on housing now forecasts a recovery, and so does Goldman Sachs.
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"We turned bullish on housing. A rebound is coming," Andrew Law, chief investment officer at $10 billion hedge-fund firm Caxton, tells The Journal. He anticipates an increase in home prices and construction next year.
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As for the positive signs, on Thursday the National Association of Realtors (NAR) reported that the number of Americans signing contracts to buy previously-owned homes in November soared 7.3 percent from October to the highest level in 19 months.
And last week the NAR announced that used home sales climbed 4 percent last month.
Hedge funds aren’t the only ones jumping into housing investments. The Dow Jones Select Home Builders Index has risen 30 percent this quarter, compared to a 10.5 percent increase for the Standard & Poor's 500 Index.
“It looks like [home] buyers are becoming more confident and are attracted to record-low mortgage rates,” Aaron Smith, a senior economist at Moody’s Analytics, tells Bloomberg. But “activity still looks depressed by historical standards.”
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