Inflation Nation

[Pro-Life]

The Housing Market Is Going To Crash Again
September 20, 2016

http://investmentresearchdynamics.com/the-housing-market-is-going-to-crash-again/

But don’t take it from me or the National Association of Realtors or the Census Bureau or the National Association of Homebuilders, the best housing market “canary” is Lending Tree stock (TREE). Lending Tree is a “derivative” of the housing market. TREE’s revenues are derived from fees paid to TREE by lenders who receive loan requests from borrowers, either via online clicks or call transfers.

Fees from mortgage products represent about 60% of revenues. Fees from auto, home equity, personal and student loans are about 40%. Auto loans would be the majority of its non-mortgage business. TREE’s revenues are 100% reliant on the number of borrowers who are looking to buy a home or car.

TREE reported Q2 results on July 28. Revenues from Q1 to Q2 were flat BUT mortgage product fees declined from Q1 to Q2 (auto and personal loans made up the balance). The drop in TREE’s revenues from mortgages in Q2 reflects the fact that less people were looking for mortgages, which means there’s less people looking to buy a home. It’s as simple as that.