Homebuilders Move Higher as Strong Housing Data Flows In; Sandy Impact Not Yet Seen (XHB) (HOV) (PHM)

November 19, 2012 10:55 AM EST
Home builders are perking up Monday following strong housing data out earlier in the session.

According to the National Association of Home Builders (NAHB), its Housing Markets Index jumped "a solid" five points to 46 in November. The Street consensus pegged the reading at a much lower 42 for the month.

The NAHB noted that it was the seventh consecutive monthly gain for the index, bringing it to its highest level since May 2006.

“Builders are reporting increasing demand for new homes as inventories of foreclosed and distressed properties begin to shrink in markets across the country,” said NAHB Chairman Barry Rutenberg, a home builder from Gainesville, Fla. “In view of the tightening supply and other improving conditions, many potential buyers who were on the fence are now motivated to move forward with a purchase in order to take advantage of today’s favorable prices and interest rates.”

All four U.S. regions posted gains in three-month moving averages: The South posted a four-point gain to 43, while the Midwest and West each posted three-point gains, to 45 and 47, respectively, and the Northeast posted a two-point gain to 31.

Correspondingly, existing home sales rose 2.1 percent to 4.79 million in October, according to the National Association of Realtors. The number compares with a downwardly-revised 4.69 million annual sales rate reported in September and expectations of 4.70 million.

The NAR notes, "The national median existing-home price for all housing types was $178,600 in October, which is 11.1 percent above a year ago. This marks eight consecutive monthly year-over-year increases, which last occurred from October 2005 to May 2006."

Total housing inventory fell 1.4 percent to 2.14 million , data show.

On the effects of Hurricane Sandy, NAR Chief Economist Lawrence Yun said, "Home sales continue to trend up and most October transactions were completed by the time the storm hit, but the growing demand with limited inventory is pressuring home prices in much of the country. We expect an impact on Northeastern home sales in the coming months from a pause and delays in storm-impacted regions."

Higher on the session Monday are ETFs like SPDR S&P Homebuilders (NYSE: XHB) and iShares Dow Jones US Home Construction (NYSE: ITB), as well as industry names like PulteGroup (NYSE: PHM), Hovnanian Enterprises (NYSE: HOV), Beazer (NYSE: BZH), Toll Brothers (NYSE: TOL), and others. Tool and goods suppliers Home Depot )NYSE: HD) and Lowe's (NYSE: LOW) are also in positive territory, while Zillow (Nasdaq: Z) is about 4 percent better on the day.

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In

Related Categories

Economic Data, Insiders' Blog

Related Entities

Existing-Home Sales, Standard & Poor's, NAHB Housing Market Index

Add Your Comment