Locked out of the US housing market? Here’s how to win ‘revenge’ in the meantime
NY Post
Hacked off with soaring housing costs and stubborn mortgage rates? Disgusted by skimpy supply and the fierce bidding wars that are now required to find a decent place to live?
If you’re looking for revenge, buy mortgage-backed securities.
No, investing in these lesser-known financial instruments won’t directly cut high housing costs. But it will position you to gain from a housing opportunity that has remained hidden by bond pundits’ persistent fixation on the Federal Reserve.
I write mostly on stocks, but a bargain is a bargain. If you’re taking retirement cash flow or just crave lower volatility, blending bonds with stocks can help.
And, yes, you could buy Treasurys – longer-term maturities if rates are falling, shorter-term if you think rates will rise. Or corporate bonds for higher yields and ties to economic growth. Or high-yield corporates (aka “junk” bonds) for occasional stock-like returns.
But to really impress friends and family, explore mortgage-backed securities. MBSs suffer a bum rap from low-quality versions that played a starring role in 2008’s financial crisis. But this isn’t that. Rather, meet MBSs backed by Fannie Mae and Freddie Mac. After the 2008-era rescue, these bonds have US government backing. Treasury-like quality! So, where is the opportunity?
