[video] Quick Take: Fed Can't Save Housing
NEW YORK (TheStreet) -- Home sales disappointed investors for the fourth consecutive month, Alan Valdes of DME Securities told TheStreet's Debra Borchardt.
The sales miss was the biggest since June 2012 and could be a sign that the Federal Reserve's artificially low interest rates are no longer helping. Valdes noted that only 26% of home sales last month were first-time home buyers and that "cash is king." He noted 32% of home sales were done in cash.
He said the people who need mortgages aren't getting them despite rates being historically low at just over 4% for a 30-year mortgage.
Seasonally, homes sales are generally the lowest around November and December due to the holidays, Valdes added. Spring and summer are usually strong selling periods for housing. At least for now, the Fed's low interest rates are no longer driving home sales.
Valdes added that even when the Fed finally says it is tapering its asset purchases, equities will likely remain the best investment going forward. He said bonds have been performing terribly. As long as the Fed protects the stock market, equities should continue higher.
-- Written by Bret Kenwell in Petoskey, Mich.