Bet The House On It

USA Today: The Chicago Mercantile Exchange, a financial marketplace dealing in the value of everything from interest rates and foreign currencies to pork bellies, has committed to offer trading next year in a category many consumers take personally: U.S. home prices.
Housing-price futures, based on the median home price in each of 10 U.S. cities, aren’t being tailored for individual homeowners. But they may provide some protection for mortgage companies, home builders and anyone else with a large stake in residential real estate if housing values slide — while giving other investors a way into a lucrative market.
The novel investment product is set to debut in April 2006, based on a final go-ahead given by the Merc earlier this fall after months of exploratory work.
While unusual, it won’t be the most exotic contract offered by the world’s largest futures exchange. That distinction has been held for six years by weather futures, which are based on regional temperature indexes and enable utilities and others with a lot riding on the weather to hedge their risk.



About David Burn

I wrote my first ad for a political candidate when I was 17 years old. She won her race and I felt the seductive power of advertising for the first time. Today—after working for seven agencies in five states—I am head of brand strategy and creative at Bonehook in Portland, Oregon.