What's the best way for somebody like me to invest in housing recovery?
I really think housing is starting to recover for real. Permits are rising, mortgage rates are rising, population is increasing, buffett likes it, I notice less people are scared, and a lot of recent grads are looking to buy, and rates are still low. Plus, the dollar is so weak, and this is one of the last hard assets to rise. So, for those reasons I want to invest in housing. Lets leave this part of the discussion out...I don't want to debate on if housing is cheap or neutral or expensive.
Anyway, since I am 22 and have only been working full time for 7 months, I don't have a lot of savings. I could afford a 3% down payment on a condo, but I live in NYC, and the monthly payments would be very high. It would be worth it in the long term due to appreciation of the hosue, and I can write off the interest...but it would leave me with little disposable income, and if something were to happen to my job, it would be a nightmare. Plus, I don't want to live here for more than a few years.
So, I need a financial asset to invest in housing. All of the REITs I see are either commercial (not the same) or multi-family (kinda the opposite of what I want...sales recovery = bad or neutral for rental).
So, I was thinking of buying BAC...they are leveraged to housing, and are way off their highs. But I don't trust management, and people tell me they hate BAC, so I think the rest of the business model is terrible.
I was thinking of buying homebuilders, but I don't know if that makes sense either. The demand is there, but there is a lot of supply too. A lot of unoccupied homes increasing in value adds nothing to the bottom line for homebuilders. Plus historcially, homebuilders are late to the party. They only make a ton of money when the economy is in super-boom mode.
So is homebuilder stocks my best option, or is there an asset class I am missing, or a stock I am missing, etc? Any and all suggestions, backed up by an explanation, would be greatly appreciated!