Homebuilders breathe sigh after earnings reports

The Dow Jones U.S. Home Construction ETF (ITB +2.6%) gains following earnings reports from Lennar (LEN +5%) and KB Home (KBH +4.5%) - both of which showed interest rate hikes taking at least some bite out of results. Also, Case-Shiller data pointed to a slight slowing in home price increases. Homebuilders have been knocked for a loop since rates started going up in May - perhaps some sell the rumor, buy the news action is warranted today.

In other homebuilder news, RBC Capital initiates coverage on Brookfield Residential Properties (BRP +4.1%) with a Buy and $27 price target.

Toll Brothers (TOL +3.7%), M/I Homes (MHO +3.9%), Ryland (RYL +6%), D.R. Horton (DHI +2.2%), Hovnanian (HOV +2.1%).

Other ETFs: XHB, PKB.

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Comments (1)
  • Jeffry Chmielewski
    , contributor
    Comments (634) | Send Message
    Very bullish on home builders. Those focusing on rising rates are just plain wrong - it is not hurting the housing market. It is the exactly the opposite. Rising rates are killing the ReFi market and leading banks to relax lending standards. The banks have no choice-- higher rates have destroyed their revenue center and they have to start lending again. Housing is about access to capital, not cost. And there is about to be a lot more access.
    24 Sep 2013, 02:14 PM Reply Like
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