Money Matters @Home

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Housing futures launch Monday,
Contracts may appeal to builders, developers
Medill News Service
The Chicago Mercantile Exchange will launch new futures and options contracts Monday pegged to housing-price indices in 10 metropolitan markets.
Also, later this spring the Chicago Board Options Exchange’s all-electronic futures subsidiary will offer a competing product based upon median home prices tracked by the National Association of Realtors.
Also, later this spring the Chicago Board Options Exchange’s all-electronic futures subsidiary will offer a competing product based upon median home prices tracked by the National Association of Realtors.
The futures contract offers investors a hedge against declining home prices. The purchaser of a contract wins if prices rise, but if they fall, the seller of the contract wins. More....

CME to launch housing futures product
Medill
"Risk is increasing in the housing market, and it is becoming more speculative, creating more need for hedging markets," he added.
The futures contract, which is pegged to the S&P/Case-Shiller Home Price Indices, offers investors a hedge against declining home prices. The purchaser of a contract wins if housing prices rise, but if they fall, the seller of the contract is the winner.
The indices track home prices by looking at "repeat sales" or same-home sales over time. Case and Shiller developed this measurement as an alternative to median home prices,
which could be skewed by a changing mix of properties. A new luxury condo would skew prices up, for example. More....
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