Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Real Estate: Is Weak Housing Data Indicative of a Blip or a New Trend?


From the Buzz & Banter: The next two months will be critical for housing as we move into the spring.

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO.

The headline read for existing-home sales data came in at 4.62 million units versus the survey consensus of 4.67 million.

Given the weather, and thus recent poor new-home data, poor forward-looking building permit data, and a sub-50 National Association of Home Builders (NAHB) survey (the first since May 13), many were expecting existing-home data (85% of the market; backwards looking) to be worse. At least, the move on the S&P (INDEXSP:.INX) to intraday highs and the fact that the SPDR S&P Homebuilders ETF (NYSEARCA:XHB) is +77 bps suggests this. The homebuilders are +1.6% across the board, with Toll Brothers (NYSE:TOL) leading the charge higher. Toll Brothers dominates East Coast markets, where there has been a drastic shortage of supply. DR Horton (NYSE:DHI), at +1.7%, dominates West Coast and Texas markets, both gateway markets.

I believe the next two months will be critical for housing as we move into the spring and prime season. As NAHB Executive Chairman of the Board Andrew Chaban expressed, there is still a vast shortage of single-family supply, relative to demographics and demand, and build rates are near historic lows. With supply coming online in the spring, will supply and demand normalize? It better -- another sub-50 on the NAHB and weak data going forward could mean "trend" as opposed to "blip."
< Previous
  • 1
Next >
No positions in stocks mentioned.
Featured Videos