Hard Dollars Back Up Housing Observations

Includes: ITB, PKB, XHB
by: Alhambra Investment Partners

By Jeffrey P. Snider

To add more concreteness and weight to today's observations about home construction (and renovation), comparable-store sales at both Home Depot and Lowes confirm the slowing of real estate construction. It is nice, if not so often, when hard dollar figures imitate to even a small degree what is being shown of adjusted statistical probabilities.

Lowes has not yet reported second-quarter figures, but will do so tomorrow. That should, hopefully, give us a better idea as to how much of a "bounce" there was in the spring vs. the winter. For Home Depot, there was a better result in the second quarter, but given the disparity of the two retailers' experience on this side of the big housing bust, it isn't clear if that was more about Home Depot continuing to really beat Lowes, or the state of housing overall. In either case, the trends are synchronous which is, at this point, important and relevant to earlier discussions.