Housing Finds Light at End of the Tunnel (XHB)
Tweet Send to a Friend
In May, home prices in the U.S. continued to rebound, with all 20 cites posting gains compared to April, according to the widely followed S&P/Case-Shiller Home Price Index. Average home prices increased 2.2 percent in May, their second consecutive month-over-month gain.
David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, said “With May’s data, we saw a continuing trend of rising home prices for the spring. On a monthly basis, all 20 cities and both Composites posted positive returns and 17 of those cities saw those rates of change increase compared to what was observed for April.”
However, Blitzer cautioned that spring is typically a strong buying season. The real test for home prices may not come until this summer. In recent months, many analysts have been quick to call a bottom in housing, and they may be right, but a few aren’t so sure, and they will likely be holding off until later this summer before making assumptions.
Investors, meanwhile, have gotten way ahead of the data by purchasing homebuilder stocks. SPDR S&P Homebuilders (NYSE: XHB) is up 23 percent year-to-date, and a few homebuilders, such as Lennar (NYSE: LEN) are higher by close to 50 percent.
Taken together, the Case-Shiller data and the run up in homebuilder stocks are a positive sign for the housing market and the U.S. economy. Few are predicting another bull market in housing, but with the bleeding finally halted, today’s data clearly helps U.S. homeowners and investors feel more confident.
Now, if we can just get those jobs number to pick up. We will find out one way or the other on Friday, with the release of non-farm payrolls in the U.S. Analysts are calling for an increase of 100k jobs.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices, said “With May’s data, we saw a continuing trend of rising home prices for the spring. On a monthly basis, all 20 cities and both Composites posted positive returns and 17 of those cities saw those rates of change increase compared to what was observed for April.”
However, Blitzer cautioned that spring is typically a strong buying season. The real test for home prices may not come until this summer. In recent months, many analysts have been quick to call a bottom in housing, and they may be right, but a few aren’t so sure, and they will likely be holding off until later this summer before making assumptions.
Investors, meanwhile, have gotten way ahead of the data by purchasing homebuilder stocks. SPDR S&P Homebuilders (NYSE: XHB) is up 23 percent year-to-date, and a few homebuilders, such as Lennar (NYSE: LEN) are higher by close to 50 percent.
Taken together, the Case-Shiller data and the run up in homebuilder stocks are a positive sign for the housing market and the U.S. economy. Few are predicting another bull market in housing, but with the bleeding finally halted, today’s data clearly helps U.S. homeowners and investors feel more confident.
Now, if we can just get those jobs number to pick up. We will find out one way or the other on Friday, with the release of non-farm payrolls in the U.S. Analysts are calling for an increase of 100k jobs.
Join StreetInsider.com FREE and get immediately alerted when news breaks on your stocks and other market items - JOIN NOW
*NEW - Download StreetInsider's FREE iPhone and iPad App - Click Here
You May Also Be Interested In
- UPDATE: Crash in American Electric Power (AEP) & NextEra Energy (NEE) Adds to Jitters
- Microsoft (MSFT) wins case brought by Google's (GOOG) Motorola unit over Xbox - Bloomberg
- Bulls and Bears Do Battle in Aeropostale (ARO); Turnaround Intact?
Create E-mail Alert Related Categories
Economic Data, Insiders' BlogRelated Entities
Standard & Poor's, S&P/Case-Shiller Home Price Index
Login with Facebook
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
