Thoughts from the Frontline

The Outlook for the Housing Market

By John Mauldin

January 2, 2004

The Outlook for the Housing Market
The True Wealth Effect
When Will the Fed Raise Rates?
The Consensus is Wrong
Early To Rise
San Francisco, LA, and Miami

This is always a fairly intensive research time of the year for me, as I begin to format my thoughts about the possible trends for the coming year. Next week, I will sit down on Thursday and Friday to write my annual forecast edition. It will be a shorter letter this week, as I husband my energy for next week's marathon.

But today we will preview one part of the puzzle that will be 2004: the housing market and its implication for interest rates.

One of the secrets of the arcane art (it is not a science!) of economic forecasting that I practice is to look at the consensus forecasts and to try and discern the reasons for the consensus. Given that most consensus thought is based upon projecting current trends or wishes into the future, the key is to discern what events might transpire which could upset current trends and thus make the consensus thinking likely to…

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