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Advanced Micro Devices was the S&P 500’s top gainer on July 26. Advanced Micro Devices opened higher on Thursday and rose to 11.5-year high price levels.
Could New Home Sales Continue to Rise?
The US Census Bureau and Department of Housing and Urban Development report monthly data on the number of new homes sold in the United States.
What to Make of the Decline in Building Permits in May
The US Census Bureau and Department of Housing and Urban Development report monthly data on building permits issued in the United States.
Why Drove Housing Starts Higher in May?
The improving conditions in the housing industry were evident again with the housing starts bouncing back in May.
A Glance at Key Updates in the Consumer Sector
So far in 2018, the S&P 500 Consumer Discretionary Index has risen 13.7%, outperforming the S&P 500 Index’s rise of 3.9%.
Analyzing the Consumer Cyclical Sector’s Dividend Yield: Part One
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Why the Fall in April New Home Sales Isn’t a Reason to Worry
As per the recent report, new single-family homes (XHB) sold in April were at a seasonally adjusted rate of 662,000 units.
Should Housing Investors Worry about Declining Building Permits?
An increase in the number of building permits in any given month is a signal for increased activity in the housing sector (DHI) in the future.
Why Housing Starts Fell 3.7% in April
The trend of high volatility in the housing market continued in April as housing starts for the month were reported to have fallen 3.7%.
Agilent Technologies: S&P 500’s Top Loss on May 15
Agilent Technologies, which is an American public research, development, and manufacturing company, was the S&P 500’s top loss on May 15.
What to Make of the March Increase in Building Permits Issued
The US Census Bureau and Department of Housing and Urban Development report monthly data on building permits issued in the United States.
Why a Rebound in March Housing Starts Isn’t Satisfying the Sector
The volatility in housing starts data remains elevated. Housing starts in March were reported to have risen 1.9%.
What to Make of the Drop in Building Permits Issued in February
The decrease in building permits spanned across the sectors in February.
What’s behind the 7% Fall in February Housing Starts?
Just as markets were celebrating the stellar 9.7% increase in housing starts in January, the February data proved to be a damper for that enthusiasm.
Increasing Building Permits Are Positive Sign for Economy
The US Census Bureau and Department of Housing and Urban Development report monthly data on building permits issued in the United States.
Surprise Uptick in Housing Starts Is Positive Sign for Industry
Speculation about housing market normalization after the hurricane-related surge seems unfounded after the January housing starts beat all expectations.
Why Building Permits Didn’t Change in December
For 2017, 1,263,400 housing units have been authorized by building permits—a 4.7% increase from 1,206,600 housing units in 2016.
Housing Starts Were Lower in December
The storm-related surge in housing starts in the southern region seems to be subsiding after the hurricanes. December’s housing starts fell 8.2%.
Should Investors Be Concerned about Fewer Building Permits?
In November 2017, housing units (XHB) authorized by building permits were at a seasonally adjusted rate of 1.298 million—a decrease of 1.4% from October.
Housing Starts Rose Due to Single-Family Construction
It was another positive month for housing starts due to reconstruction efforts in hurricane-battered areas. In November, housing starts rose 3.3%.
Key Dates for Consumer Stocks This Week
On December 14, Oppenheimer downgraded Gap (GPS) to “perform” and cut the target price to $30 from $33.
Analyzing Housing Starts in October 2017
In October 2017, housing starts rebounded sharply from the slump in September. October housing starts beat the market’s expectations.
The Truth about Housing Starts in September 2017
In September 2017, US housing starts fell from an upwardly revised August number of 1.183 million to 1.127 million units—a negative surprise.
Is a Fall in Building Permits a Cause for Concern?
Building permits fall again The number of building permits issued is considered an important leading indicator for the US economy. The health of the construction industry, which employs a lot of people, can be assessed by changes in the number of building permits issued. Building permit data is considered a leading indicator because permits are applied […]
What a Building Permit Bounce Means for the Housing Market
The number of building permits issued in June 2017 stood at 1.25 million, an improvement from May’s 1.17 million.
Analysts’ Recommendations for Sherwin-Williams
As of July 12, 2017, 65% of the analysts recommended a “buy” for Sherwin-Williams, 30% recommended a “hold,” and 5% recommended a “sell.”
D.R. Horton Was the S&P 500’s Top Gainer on July 7
D.R. Horton, one of the largest home construction companies in the US, rose on Friday. Homebuilders rose with D.R. Horton leading the rally.
Why Eric Rosengren Is Worried about US Unemployment Rate
Eric Rosengren, president of the Federal Reserve Bank of Boston, warned about the jobless rate being below the natural full employment estimate of 4.7%.
Could Equity Valuations Pick Up in a Lower Interest Rate Environment?
According to Morgan Stanley Private Wealth Management’s Andy Chase, long-term fundamentals look strong with the recent pickup in economic activity.
September 2016 Projections: US GDP Growth and Unemployment
FOMC (Federal Open Market Committee) participants have toned down their projections for US GDP growth in 2016 for the second successive quarter.
Homebuilder Sentiment Improved in August
The NAHB Wells Fargo Housing Market Index, which measures homebuilder sentiment, peaked at 71 during the height of the housing bubble in late 2005. It bottomed out at 8 in early 2009.
How Did Building Permits Turn Out in July?
Overall, building permits for single-family residences fell from 738,000 to 711,000 in July. Multifamily permits rose from 386,000 to 411,000.
Did Housing Starts Rise Again in July?
In July, the Northeast saw housing starts jump from 116,000 to 134,000, while starts rose from 171,000 to 175,000 in the Midwest.
Understanding the Implications of Strong Housing Data
The U.S. Census Bureau published the July housing data on August 16. The release was well above market forecasts. Housing starts rose by 2.1% to 1,211,000.
Why Did Foreclosure Completions Rise in June?
In June, the total foreclosure inventory fell 26% from a year ago to 375,000 homes. This works out to be about 1% of all homes with mortgages.
Job Cuts Rose in July but Fell Sharply on an Annual Basis
Planned job cuts rose 19% in July compared to June. However, they fell 57% YoY (year-over-year) in July.
Hourly Earnings Increased 2.6% Year-over-Year in July
Average hourly earnings rose $0.08 month-over-month in July 2016 and 2.6% year-over-year to $25.61.
July Payrolls Stayed Strong
In July 2016, non-farm payrolls rose by 255,000. Non-farm payrolls easily topped Wall Street analysts’ estimate of 185,000.
Public Construction Spending Falls
In the quarter ending June 30, 2016, public construction spending fell to 1.5% on a month-over-month basis.
Putting Housing Starts into Perspective
In June, housing starts rose to an annualized rate of 1.2 million from 1.1 million the month before. Building permits rose from 1.1 million to 1.2 million, as well.
Where’s the First-Time Homebuyer?
In June, the share of existing home sales attributable to the first-time homebuyer was 33%—up 3 percentage points from May.
Construction Spending Fell in June
In June 2016, private construction fell 0.6%, and public construction fell 0.6% month-over-month.
New Home Sales Not the Only Reason for the Bullish Housing Market
In June 2016, existing home sales reached an annualized ~5.6 million. In May, existing home sales were ~5.5 million.
Housing Indicators Show Homebuilders Enjoying Good Times
The NAHB Wells Fargo Housing Market Index peaked at 71 during the height of the housing bubble in late 2005.
Homebuilders Not Totally Swayed by the Uptick in Building Permits
Overall, permits for single-family residences rose slightly from 731,000 to 738,000. Multifamily permits rose from 389,000 to 405,000.
For Now, D.R. Horton Avoids Fallout from Declining Energy Prices
D.R. Horton (DHI) reported net income of $294.8 million, or $0.66 per share, for 3Q16.
D.R. Horton Delivers Strong Revenue Growth for 3Q16
D.R. Horton (DHI) reported 3Q16 revenue of $3.1 billion, a 10% increase on a YoY (year-over-year) basis and a sequential increase of ~17%.
D.R. Horton Guides Higher for Remainder of 2016 and 2017
D.R. Horton (DHI) sounded relatively optimistic on its conference call. It was clearly happy with the most recent quarter despite the stock price reaction.
First-Time Homebuyers Affect D.R. Horton’s Gross Margins in 3Q16
Like most of the other builders, D.R. Horton (DHI) has been reporting lower gross margins due to sticker shock.
PulteGroup Unveils the Second Part of Its Value-Creation Strategy
PulteGroup announced the second phase of its value creation strategy—reducing costs, reducing land investment, and increasing share buybacks.
PulteGroup Reports Increased Earnings
PulteGroup (PHM) reported net income of $118 million or $0.34 per share. This beat Wall Street analysts’ estimate of $0.33 per share.
Why Did PulteGroup’s Gross Margins Fall?
PulteGroup’s (PHM) gross margins for 2Q16 came in at 21.5%—down 40 basis points year-over-year and 180 basis points from the fourth quarter.
PulteGroup Reports a Big Jump in Revenues
PulteGroup (PHM) reported 2Q16 revenues of $1.8 billion—a 41% increase from a year ago. Revenues increased in home sales and financial services.
Why Many Homeowners Think It’s a Good Time to Sell
Fannie Mae’s monthly National Housing Survey asked respondents if it’s a good time to buy and sell a house. They’re more confident that it’s a good time to sell.
Foreclosure Inventory Is Back to October 2007 Levels
In May, the total foreclosure inventory fell 25% from a year ago to 390,000 homes. It takes us back to the levels in late 2007.
Homebuilder Earnings and Housing Data on Tap this Week
This week is relatively data-light. However, a slew of reports will interest real estate investors.
Why Did Job Openings Fall in May?
In May 2016, there were 5.5 million job openings—up 2% YoY (year-over-year). This is the lowest print since February.
Why Wage Inflation Could Be Picking Up
Given the terrible growth in payrolls, we might see more flattening of wage inflation back towards the current inflation rate.
June Payrolls Rebound after a Dismal May
In June 2016, non-farm payrolls rose by 287,000. Non-farm payrolls easily topped Wall Street analysts’ estimate of 180,000.
Central Bankers Push for Fiscal Stimulus
Recently, Mario Draghi pushed European governments to do more in the way of fiscal stimulus. The Fed made similar arguments.
Why Were Housing Starts Flat in May?
In May, housing starts were unchanged month-over-month at 1.2 million units. Building permits were flat at 1.1 million.
First-Time Homebuyer Falls to 30% of Existing Home Sales
In May, the share of existing home sales attributable to the first-time homebuyer was 30%—an decrease from 32% in April. Historically, this was closer to 40%.
Why Did Construction Spending Disappoint in May?
Construction spending fell 0.8% to a seasonally adjusted annual rate of $1.12 trillion in May from $1.14 trillion in April.
Construction Spending Has Been Falling as a Percent of GDP
In the quarter ending March 31, construction spending as a percentage of the GDP was flat at 6.2%. This was a big rise from a year ago when it was 5.7%.
Mortgage Purchase Applications Fell Last Week
Mortgage purchase applications fell 3% in the week ending June 24, 2016. We’re at the tail end of the seasonally strong period for house purchases.
Housing Market Update: New Home Sales Increased in May
New home sales increased to an annualized pace of 551,000—up 8.7% from the same month last year. They were also down about 6% sequentially from April.
Why Did Existing Home Sales Rise in May?
At the end of May, there were 2.15 million existing homes for sale. This represents a 4.7-month supply. A level of six to 6.5 months means a balanced market.
KB Home Just Reported Strong Revenue Growth for 2Q16
For 2Q16, KB Home reported revenues of $811 million, which easily topped the Wall Street estimate consensus of $750 million. Revenues increased by 30% YoY.
Lennar Recognizes the Huge Housing Deficit
While Lennar’s CEO, Stuart Miller, recognizes that 1.2 million units could be the new normal, it’s important to note that 1.5 million starts was the normal pace from 1959 to 2002.
How Lennar Adapts to Different Phases of the Housing Cycle
Lennar (LEN) is pulling back its land purchase plans and looking to exit new land purchases quickly. It calls this “shortening duration.”
Did Lennar Beat Wall Street’s Earnings Estimates in 2Q16?
On June 21, 2016, Lennar (LEN) reported 2Q16 net earnings of $218.5 million, or $0.95 per share, compared to its net income of $183 million, or $0.79 per share, in 2Q15.
Lennar’s Gross Margin Falls, but Guidance Remains for 2016
In 2Q16, Lennar’s (LEN) gross margin rose 40 basis points sequentially to 23.1%. In 2Q15, the company’s gross margin was 23.8%.
How Much Did Lennar’s Revenue Rise in 2Q16?
In 2Q16, Lennar’s ASP (average selling price) rose 4% to $362,000 from $348,000 during the same period last year.
June 2016 Economic Projections: US GDP Growth and Unemployment
FOMC participants have toned down their projections for US GDP growth in 2016 and 2017. Except for the upper end of the GDP range for 2017, all metrics saw a decrease from March projections.
Foreclosure Completions Rose by 1,000 Units in April
Foreclosure completions rose by 1,000 units to 37,000 in April 2016, according to CoreLogic. Completions fell 23% year-over-year. It’s a relatively high number.
How the Rise in Job Openings Affects Homebuilders
In April 2016, there were 5.8 million job openings, up 4% YoY (year-over-year).
Announced Job Cuts Fell in May
Planned job cuts fell 27% in May year-over-year. They fell 53% from April.
May Payrolls Were Exceptionally Weak
In May 2016, non-farm payrolls rose by 38,000, which missed Wall Street analysts’ estimate of 160,000 by a wide margin.
Average Hourly Earnings Rose in May
Aside from employment, the most important indicator of economic well-being is wages.
Central Bankers Push Governments for More Fiscal Stimulus
A common theme from central bankers these days is that while they can stimulate more, they’re reaching the point of diminishing returns.
Why Did Housing Starts Rise in April?
In April, housing starts rose to an annualized rate of 1.2 million from 1.1 million the month before. Building permits rose from 1.08 million to 1.13 million.
Share of Homes Going to the First-Time Homebuyer Rose in April
In April, the share of existing home sales attributable to the first-time homebuyer was 32%—an increase from 30% in March.
Why Did Construction Spending Disappoint in April?
Construction spending rose to a seasonally adjusted annual rate of $1.1 trillion in April from $1.2 trillion in March. Spending rose 4.5% YoY.
Regulations Are Making Affordable Starter Homes Hard to Build
The amount of regulations and taxes instituted over the past ten years increased the cost of building. It’s difficult to build starter homes that are affordable.
Do US Economic Indicators Support a Rate Hike?
US economic growth was revised to 0.8% in the second reading of GDP for 1Q16 compared to the previous month’s 0.5%.
US Stock Indexes Rose as the US Economy Recovered
Upbeat new home sales data boosted investors’ sentiments about US economic recovery, causing US equity indexes to rise from May 17 to May 24, 2016.
Geographic Results for Toll Brothers in Fiscal 2Q16
In Toll Brothers’ North segment, the ASP (average selling price) rose from $630,000 to $705,000 in fiscal 2Q16.
Did Toll Brothers’ Earnings per Share Rise in Fiscal 2Q16?
After Toll Brothers reported fiscal 2Q16 earnings on May 24, 2016, its stock rose by $2.41 to close the day at $29.51.
Does Toll Brothers Expect Its Gross Margin to Expand in 2016?
In fiscal 2Q16, Toll Brothers’ (TOL) gross margin, excluding interest and write-downs, rose to 25.7% compared to 25.3% a year ago.
Is Pricing Growth Stalling for Toll Brothers?
Toll Brothers (TOL) reported that its ASP (average selling price) for fiscal 2Q16 was $855,500, a drop of 2% on a quarter-over-quarter basis.
Toll Brothers Reports a Big Increase in Revenues in Fiscal 2Q16
Toll Brothers (TOL) reported fiscal 2Q16 revenues of $1.1 billion. Deliveries in the second quarter rose 31% in dollar terms and 9% in units.
Inside the Existing Home Sales Increase in April
In April 2016, existing home sales reached an annualized 5.47 million rising by 6% YoY over March, when existing home sales were 5.36 million.
Behind Homebuilder Sentiment So Far in May
The NAHB Wells Fargo Housing Market Index measures homebuilder sentiment has been increasing steadily since 2009. Recently, it’s started to accelerate.
Do April’s Housing Permits Point to Growth Ahead?
Overall, permits for single-family residences rose slightly from 725,000 to 736,000 in April.
Mortgage Purchase Applications Rose Slightly
Mortgage purchase applications rose 0.4% in the week ending May 6, 2016. We’re in the seasonally strong period for house purchases.
Servicers Continue to Struggle as Delinquencies Fall
The federal government has taken steps to reduce foreclosures, including encouraging servicers to pursue other means of dealing with delinquent borrowers.
Foreclosure Completions Ticked Up in March
Foreclosure completions rose by 2,000 units to 36,000 in March 2016, according to CoreLogic. Completions fell 15% year-over-year.
Why Did Job Cuts Increase in April?
Planned job cuts rose 6% in April year-over-year. They rose 35% from March. That being said, the number for December 2015 was the lowest in years.
Is Wage Inflation Finally Picking Up?
Given the rough patch in the global economy, the Fed might have an excuse not to hike rates in June. If wage inflation is returning, the Fed’s hands will be tied.
Why Did Non-Farm Payrolls Disappoint in April?
In April 2016, non-farm payrolls rose by 160,000. Non-farm payrolls missed Wall Street analysts’ estimate of 200,000 by a wide margin.