Struggling home builders rise on solid housing data

|By:, SA News Editor

Struggling home builders are jumping ahead on respectable but in-line housing data, as at least overall construction has climbed in two of the past three months.

"Looking at the underlying trend in one-family starts suggests that the pace of groundbreaking activity is actually fairly steady," an RBS economist says, unconcerned about July's drop in single-family starts since "anecdotal evidence suggests builders may be holding back on new construction in part to reap the benefits of higher prices."

Raymond James "continue[s] to believe we are in the early stages of a sustainable up-cycle in U.S. housing," and favors Toll Brothers (TOL +1.5%), which it sees as less sensitive to mortgage rates.

PHM +3.4%, LEN +3.1%, KBH +2.9%.

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