Data don’t show a housing boom but a slow and halting recovery is still good news
Investors looking for a breakout in housing sales are disappointed with the data on home sales and housing starts released today and yesterday. That’s why shares of homebuilders such as Lennar (LEN) are down—by 2.5% in this instance—today. The recent huge rally in stocks in the sector has left them vulnerable to profit taking on anything less than stellar news.
It’s not, however, that the news in the last two days is bad. It does indeed argue for a recovery in the sector. But that recovery isn’t going to be a moon shot but rather a slow and halting recovery. For the patient, a sell off here on disappointment that the recovery isn’t going to be faster would be a chance to get into a sector that indeed does seem to be on the mend. Read more
Is this the end of the housing recovery? Even talking about an end to government subsidies sends the market into a tizzy
The program that gives first time home buyers an $8,000 tax credit is due to expire at the end of November.
The Federal Reserve will talk about winding down its buying of mortgage-backed securities in its two-day meeting this week.
Will that be the end to the rally that saw new-home sales rise 9.6% in July from June? That’s the biggest sequential month to month jump since 2005. And that saw stocks of home builders such as D.R. Horton (DHI) and Lennar (LEN) soar 40% and 66%, respectively, from July 1 to September 21?
Could well be. The signs aren’t good. Read more
