Homebuilders Rally On Solid Existing Home Sales Data (XHB, TOL, DHI, PHM)

How do you like your home? Well, if you have an existing one, apparently you like it sold.

Homebuilder stocks and ETFs are moving higher on existing home sales data shows that 6.54 million in sales for November exceeded the estimate of 6.25 million existing homes expected to be sold.

The number is 7.3% greater than the 6.09 million homes sold in October 2009, and 44.1% greater than the 4.54 million sold in November 2008.

The National Association of Realtors Chief Economist, Lawrence Yun, said that the "rise was expected" as "a rush of first-time buyers" didn't want to miss out on the first-time homebuyer tax credit. Yun "expects a temporary sales drop while buying activity ramps up for another surge in the spring when buyers take advantage of the expanded tax credit."

The national median existing-home sales price was $172,600 in November, representing a 4.3% decline from November 2008. The report says that distresses properties, which account for 33% of sales, will continue to distort prices downward, as they are sold at a deep discount in relation to traditional home prices.

November marks the second month in a row where all price classes experienced a gain in sales. Prior to October, only the lower priced homes were the consistent gainers.

Stocks to watch on the data:

• Pulte Homes (NYSE: PHM) up 3..13% to $9.72;
  
  
• D.R. Horton (NYSE: DHI) up 2.42% to $11.00;
  
  
• Toll Brothers, Inc (NYSE: TOL) up 3.54% to $19.03;
  
  
• M.D.C. Holdings (NYSE: MDC) up 2.83% to $31.65;
  
  
• SPDR S&P Homebuilders (NYSE: XHB) up 1.78% to $15.36; and
  
  
• iShares Dow Jones US Home Construction (NYSE: ITB) up 2.60% to $12.05.

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