Homebuilders Break Out On Economic Optimism (HOV, MHO, BZH, LEN, SPF, PHHM, CVCO, BHS)
Mortgage applications fell last week, marking the Mortgage Bankers Association index’s biggest drop since February, according to Bloomberg’s coverage Wednesday morning. Under normal circumstances one might expect a decline in mortgage applications to weigh on homebuilding stocks, but that’s far from the case in today’s session, as investors bid up shares by as much as 10%.
As a whole, the Homebuilder Stocks Index is ahead by 3.6% today. It currently trails the S&P 500 by -2% over the last month. Hovnanian Enterprises (HOV) is leading the rally with an 11% spike, followed by M/I Homes (MHO), Beazer Homes (BZH), and Lennar (LEN), all up by more than 5%.
Federal Reserve Chairman Ben Bernanke reiterated his plan to keep rates low for an “extended period” today. However, mortgage rates are on the rise as the economy shows further signs of recovery, and investors are gauging the health of the housing sector as homebuyer tax credit programs wind to a close.
Back in February, the National Association of Realtors’ chief economist, Lawrence Yun said that swings related to the tax credits “are masking the underlying trend, which is a broad improvement over year-ago levels.” A month later the Commerce Department reported that February new home sales slid -2.2% to a new record low.
Over the past month, components of the Homebuilder Stocks Index are split down the middle, with Beazer, Standard Pacific (SPF), and Hovnanian gaining more than 15%, while Palm Harbor Homes (PHHM), Cavco Industries (CVCO), and Brookfield Homes (BHS) have slipped by more than -5%.
|Home | Find | Research | Track | Register | My Account | Logout||Web site design by LightMix|
|© 2010 Indie research Corp. All rights reserved.|