A far-faster-than-expected 15.7% gain in housing starts in July has the homebuilders sharply higher. Lenner (LEN +2.6%), Comstock (CHCI +5.8%), Ryland (RYL +2.4%), Hovnanian (HOV +3.2%), D.R. Horton (DHI +2.1%), Toll Bros. (TOL +1.4%), PulteGroup (PHM +1.1%), KB Home (KBH +1.9%).
Commenting on the number, Bill McBride notes starts in Q1 averaged 925K on a seasonally-adjusted annualized rate, 997K in Q2, and that Q3 appears to be off to a solid start (1.093M in July). By year's end, McBride expects 2014 housing starts to increase by a double-digit pace over a weak 2013.
The homebuilders have their tails in their air following D.R. Horton's big earnings results which showed reports about the end of the housing recovery may be premature (DHI +8.5%). The company reported average sales price gains of 10%, orders by value up 14%, and the value of properties under contract up 20%.
"Our weekly sales pace has accelerated in January," says Chairman Don Horton.
In a virtual repeat of last quarter's post-earnings action, Comstock Holding (CHCI) soars 38.65% premarket. Q1 homebuilding revenues nearly quadrupled Y/Y and "approximated the homebuilding revenues generated for all of FY12." CHCI says it is "in easy range" of its previous FY13 revenue guidance of $55-64M, prompting the company to raise its outlook to $64-69M and to express confidence in its ability to return to profitability within the year. (PR)
Comstock Holding Co Inc is a multi-faceted real estate development and construction services company focused on the Washington, D.C. metropolitan area. It operates its business through three segments: Homebuilding, Multi-family and Real Estate Services.