U.S. New Home Starts Rose 6.8% in May, Missing Views; Jobs, Rates Could Influence Purchases
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Homebuilding stocks are on watch Tuesday following new data showing a solid rise in new home construction for May, but less than most expected.
The U.S. Commerce Department said that housing starts rose 6.8 percent to a 914,000 annualized rate. Aprils rate was revised to 856,000 units and the Street was looking for starts of 950,000 units in May.
Building permits of 974,000 in May fell short of the 983,000 expected and compares to 1.005 million reported in April.
Given that permits were ahead of starts, residential construction is expected to keep rising and low mortgage rates and improving job prospects bring in buyers.
Multifamily projects rose 21.6 percent to an annualized rate of 315,000 buildings.
The Midwest saw a 13.7 percent drop in starts while the South improved 17.8 percent and West saw a 5.7 percent gain. Some cite wet weather conditions on reasoning behind the drop.
Traders will be keeping an eye on SPDR S&P Homebuilders (NYSE: XHB), Lennar Corp. (LEN), Toll Brothers (NYSE: TOL), PulteGroup (NYSE: PHM), KB Home (NYSE: KBH), Hovnanian Enterprises (NYSE: HOV), DR Horton (NYSE: DRH), Beezer (NYSE: BZH), and others Tuesday.
The U.S. Commerce Department said that housing starts rose 6.8 percent to a 914,000 annualized rate. Aprils rate was revised to 856,000 units and the Street was looking for starts of 950,000 units in May.
Building permits of 974,000 in May fell short of the 983,000 expected and compares to 1.005 million reported in April.
Given that permits were ahead of starts, residential construction is expected to keep rising and low mortgage rates and improving job prospects bring in buyers.
Multifamily projects rose 21.6 percent to an annualized rate of 315,000 buildings.
The Midwest saw a 13.7 percent drop in starts while the South improved 17.8 percent and West saw a 5.7 percent gain. Some cite wet weather conditions on reasoning behind the drop.
Traders will be keeping an eye on SPDR S&P Homebuilders (NYSE: XHB), Lennar Corp. (LEN), Toll Brothers (NYSE: TOL), PulteGroup (NYSE: PHM), KB Home (NYSE: KBH), Hovnanian Enterprises (NYSE: HOV), DR Horton (NYSE: DRH), Beezer (NYSE: BZH), and others Tuesday.
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