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Old 06-24-2012, 02:48 AM   Nav to Top  #1
materics22
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Default How does the housing market affect the stock market?

How does the housing market affect the stock market so much?
I heard that the housing market being low in sales and with the forclousure market crashing, it is affecting investors so much that they are moving money out of equities (stocks) and investing more in safer investments. Thats why the stock market has been down so much in the past week.

How does this happen? I was reading about it, but I didn't really understand. Are investors pulling out their stocks from big lenders? How exactly does it affect the stock market? I need help understanding it in normal terms that make sense.

Please advise, thank you!!
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Old 10-11-2012, 04:00 PM   Nav to Top  #2
eatmyshorts
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Originally Posted by materics22 View Post
How does the housing market affect the stock market so much?
I heard that the housing market being low in sales and with the forclousure market crashing, it is affecting investors so much that they are moving money out of equities (stocks) and investing more in safer investments. Thats why the stock market has been down so much in the past week.

How does this happen? I was reading about it, but I didn't really understand. Are investors pulling out their stocks from big lenders? How exactly does it affect the stock market? I need help understanding it in normal terms that make sense.

Please advise, thank you!!

It's really not too complicated. Homes are one of the only things the Chinese can't build and ship to us, so we still make them ourselves. And we build a lot of homes worth lots of money. So if our homes aren't selling, it affects our economy big-time. It means fewer jobs, less demand for goods produced, etc. If our economy is bad, American companies suffer too. If American companies suffer, people don't want to invest in them (aka the stock market). bad housing = bad stock market. Got it?
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Old 11-04-2012, 06:08 PM   Nav to Top  #3
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Originally Posted by eatmyshorts View Post
It's really not too complicated. Homes are one of the only things the Chinese can't build and ship to us, so we still make them ourselves. And we build a lot of homes worth lots of money. So if our homes aren't selling, it affects our economy big-time. It means fewer jobs, less demand for goods produced, etc. If our economy is bad, American companies suffer too. If American companies suffer, people don't want to invest in them (aka the stock market). bad housing = bad stock market. Got it?
People buy houses when they have money. People invest into stock market when they have money. When less people buying houses, we have less people who has money to to invest into stock market. less money, lower demand.
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Old 02-08-2013, 08:00 PM   Nav to Top  #4
Longjohntrader
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Default Supply and Demand 101

Originally Posted by Vicorka View Post
People buy houses when they have money. People invest into stock market when they have money. When less people buying houses, we have less people who has money to to invest into stock market. less money, lower demand.
Supply and demand. Its simple as just described on these threads. With regard to the housing market affecting the stock market, its capital supply and credit markets. The credit market is crushed from the housing bubble. This means people have a hard time acquiring homes or goods on credit and will largely rely on cash. Cash is the key component in hard supply therefore with little availability from trades (buying and selling of goods), there is little capital to apply.
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Old 08-22-2013, 02:12 AM   Nav to Top  #5
CandaceKroslak
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Default Re:How does the housing market affect the stock market?

Housing market is directly proportional to stock market.Economy of a country is affected if houses are not sold.There will be less money to invest and this will definitely affect stock market.
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Old 06-12-2014, 01:37 AM   Nav to Top  #6
jassielarry
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It's purely psychological. The "housing market" is really the "real estate" market which accounts for a lot of money. There are also a lot of related industries which is affected if the real estate market goes down. First is the home builders or construction industry then there is the materials suppliers, then the mortgage industry which makes loans to buyers and then there's the real estate agents, title companies, escrow companies, home insurance companies, furniture companies - all their jobs hang on how well the housing market is doing. When the housing or real estate market peaked and began sliding down. Investors in the stock market finally decided that there is too much fear and decided to sell their stocks. Selling causes the stock market to drop.
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Old 02-11-2015, 04:46 AM   Nav to Top  #7
Tracy001
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Housing market is basically the real estate market that involves a lot of money. When you see a drop in this particular sector you also notice significant changes in the related areas like construction industry, mortgage industry, escrow companies, home insurance companies, title companies, furniture companies and so on. When real estate industry start sliding down you see a lot of Selling and that causes the stock market to drop.
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Old 03-02-2015, 08:15 AM   Nav to Top  #8
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Default How to invest in stocks online for beginners

Housing market does affect the stock market. But a deep analysis is required to gauge the direction the market will go towards in response to the housing market. For an in-depth technical analysis of the current stock market trends please visit otcbully.com
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Old 04-30-2015, 09:06 AM   Nav to Top  #9
RockFlower
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If people are not investing their money in housing then obviously there will be fall in housing industries and so in the related industries. So this is the reason it also affects the stock market.
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