iShares US Home Construction

For the week ended March 15, retail same-store sales grew 0.7% and 1.5% week-on-week and year-on-year, respectively.

Housing has been a bright spot in the US economy. But over the past month, housing stocks haven’t been performing well. ITB, a housing-focused fund, has fallen 4.7%.

US non-farm payrolls rose by 295,000 in February 2015 from a downwardly revised January number of 239,000 compared to 257,000 reported earlier.

Average hourly earnings rose by 9 cents on a month-over-month basis in October and were up 2.4% YoY (year-over-year) to $25.20. However, wage growth is still barely outpacing inflation.

Buyers are reluctant to pay higher prices, and builders have to offer incentives, which reduces margins. Lennar’s higher margins will not be sustainable.

In April, the number of building permits issued was reported at 1.35 million, a decrease of 1.8% from the downward revised March reading of 1.37 million permits.

Average hourly earnings fell by 1 cent on a month-over-month basis in December 2015 and were up 2.5% year-over-year to $25.24. Average weekly hours were flat at 34.5.

Home Depot (HD) reported record results in fiscal 2016. Sales reached a new high of $88.5 billion in fiscal 2016, up 6.4% year-over-year (or YoY).

Resilient Flooring net sales in the second quarter and first six months of 2014 declined 2%. Net sales were driven by lower volume in the Americas and Europe. Operating income also declined.

ETFs present another investment avenue. Apart from pure homebuilder ETFs, there are many other ETFs that offer exposure to homebuilders.

A professional customer is one who’s looking for products to complete projects for other customers.

Existing home sales in the US recorded a 482,000 annualized figure in June—compared to 517,000 recorded in May. It failed to meet census expectations of 550,000 units.

Lennar sees allocation in major sector-specific homebuilder ETFs such as the SPDR S&P Homebuilders ETF (XHB). XHB has a 3.36% stake in Lennar.

The Federal Housing Finance Agency Housing Price Index for March was released on Tuesday, May 27. This release also included quarterly data comparisons for Q1 2014.

The interest rate spread between 10-year Treasury securities (IEF) and 30-year conventional mortgages (VMBS) was at historic highs at the end of 2008 and the beginning of 2009

Honeywell (HON) provides control solutions for various residential and industrial applications through the Honeywell Automation and Control Solutions–ACS unit.

Lowe’s is also experimenting with the idea of rolling out other smaller format stores like City Center stores in other under-penetrated and high-density urban areas in the US.

D.R. Horton sees allocation in major homebuilding sector-specific ETFs like the iShares Dow Jones US Home Construction Index Fund (ITB).

Lennar showed mixed results compared to its peers based on the PE and PBV ratios. The ETFs outperformed Lennar based on the PE and PBV ratios.

According to the January report from NAR, existing home sales decreased 3.6% to a seasonally adjusted annual rate of 5.57 million homes in December.

The housing market, especially construction, has been a cause of concern to policymakers in the Federal Reserve.

Job gains may have been strong, but two other measures are also important—the labor force participation rate and average hourly wage growth.

For the first quarter of 2015, Lennar (LEN) reported $1.6 billion in revenue. This is an increase of 21% year-over-year.

In December 2015, non-farm payrolls increased by 292,000, easily topping Wall Street’s estimate of 200,000.

The 20-city index reading for March, implied an average month-on-month (or MoM) price increase of 0.9% in the 20 metros tracked by the index.

Lululemon’s latest results were well-received by markets. The stock jumped over 9% after the company released its results on December 11.

The 30-year bond is the longest maturity Treasury security.

Lowe’s (LOW) operates in the home improvement retail industry. The company competes with a number of retail and wholesale players.

Lowe’s sources its merchandise from over 7,000 suppliers with no supplier accounting for more than 6% of sales.

Driving growth from sales to pro customers is a key growth opportunity for the world’s largest home improvement retailer.

The Home Depot’s (HD) focus on the pro customer allows the retailer to compete in the installations market and the product demand the services create.

Lowe’s (LOW), announced that it had entered into a definitive agreement to acquire Canada’s largest home improvement retailer, Rona (RON.TO).

The inflation and interest rate expectations of consumers and firms are important variables determining bond prices.

When real estate developers or REITs like AvalonBay (AVB) are confident about the economy, they build more in anticipation of future demand from consumers.

The US consumer confidence index recorded its biggest fall in more than three years in December.

The OECD (Organisation for Economic Co-operation and Development) has said that global economic growth has peaked.

For Sherwin-Williams, 64% of the analysts recommended a “buy,” 36% recommended a “hold,” and none of the analysts recommended a “sell.”

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.

The United States National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market.

The HMI was reported to have decreased by two points to 68 in June as compared to a May reading of 70.

Rising interest rates increase the cost of owning a home for prospective buyers, but the housing market hasn’t yet felt the impact of rate increases.

The consumer confidence index has increased to 128.0 in May as compared to a downward revised April reading of 125.6.

As per the recent report, new single-family homes (XHB) sold in April were at a seasonally adjusted rate of 662,000 units.

The US National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market.

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.

The housing market index was reported to have increased by two points to 70 in May compared to the downwardly revised April reading of 68.

According to the NAR’s April 2018 report, existing home sales rose 1.1% to a seasonally adjusted annual rate of 5.6 million homes in March.

The US Census Bureau and Department of Housing and Urban Development report monthly data on building permits issued in the United States.

The volatility in housing starts data remains elevated. Housing starts in March were reported to have risen 1.9%.

The HMI (housing market index) was reported to have decreased by one point to 69 in April 2018.

The “Job Openings and Labor Turnover Survey” (or JOLTS) data for February was reported on April 13, and it contains information about job openings and total separations.

In March, the service sector continued to grow but at a slower pace.

The United States National Association of Realtors (or NAR) releases a monthly report on the existing home sales (ITB) market.

The decrease in building permits spanned across the sectors in February.

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.

The March housing market index reading is at 70, a one-point decline from the revised February reading of 71.

January’s JOLTS (Job Openings and Labor Turnover Survey) data, which contains information about job openings and total separations, was reported on March 16.

The Conference Board uses the number of building permits issued as one of the key constituents of its LEI (Leading Economic Index) model.

The US Bureau of Economic Analysis (or BEA) has released its second 4Q17 GDP estimate, projecting that the US economy increased at an annual rate of 2.5%.

The United States National Association of Realtors (or NAR) releases a monthly report on existing home sales (ITB).

February’s HMI reading was reported at 72, unchanged from the January reading and two points below the 18-year peak reported 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.

Comments from NAHB members indicated that homebuilders are optimistic about the future demand and projected increased activity in the housing sector.

Building permits and the economy The number of building permits issued each month is a constituent of the Conference Board LEI (Leading Economic Index). The construction and housing industry (PKB) is a major job provider in the economy, and changes in activity in the sector affect employment conditions and aggregate demand. A higher number of building permits is a leading […]

According to the latest report from NAR, existing home sales rose 5.6% to a seasonally adjusted annual rate of 5.81 million homes in November.

For November, the NAHB Housing Market Index was reported as 74—an increase of five from October and an 18-year high.

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.

ADP’s jobs report for November was published on December 6. It provided deeper insight into improvements in US employment.

The Conference Board Consumer Confidence Index for November came in at 129.5, up from 126.2 in October.

According to the latest report from NAR, existing home sales have risen 2% to a seasonally adjusted annual rate of 5.48 million in October.

In October 2017, building permits were at a seasonally adjusted rate of 1.297 million—an increase of 5.9% from the reading of 1.225 million in September.

The University of Michigan Preliminary Consumer Sentiment for November was reported at 97.8, which was 2.9 lower than the final October reading of 100.7.

For October, service sector activity rose at a pace not seen since the inception of the report. The non-manufacturing index reached a lifetime high of 60.1.

Given that markets remain focused on the next Fed chair appointment and US tax reforms, volatility (VXX) could be low after the October jobs report.

In September 2017, building permits were at a seasonally adjusted annual rate of 1.215 million—a fall from August’s 1.272 million and 4.3% below September 2016.

FOMC members noted that labor market conditions could take a hit due to the hurricanes in August and that this was evident in the October non-farm payrolls report.

As per the September ADP Employment Report, there was a major drop in the number of jobs created in the trade, transport, and utility sector.

US Dollar index reaches a 14-month low The US Dollar Index (UUP) continued with its fall as investors preferred major peers. In the week ended July 21, the US Dollar Index closed at 93.78, falling 1.7% from the week prior. It is headed for its fifth consecutive month of loss this year. Conflicting news from […]

Despite the strong growth in employment numbers, the Fed’s latest monetary policy report had some comments about slow wage growth.

The Fed’s decision had a limited impact on the S&P 500 (SPY), which closed last week at 2,433.2, a gain of 0.06% for the week.

As central banks buy up more bonds and more bonds move into negative yields, investors search among a smaller pool of substitutes and trades get crowded for higher risk alternatives. According to the Wall Street Journal, higher prices for stocks, bonds, and real estate have caused net wealth to swell to over 500% of national […]

Stanley Black & Decker (SWK), the world’s leading toolmaker, declared its 2Q16 earnings before the Market opened on July 22. SWK stock closed 4.8% higher on the day of the earnings release.

A number of factors have contributed to the slowdown, including soft overseas growth and a sharp drop in capital spending by energy and mining companies.

Stanley Black & Decker (SWK) derives more than half of its tools and storage sales from the United States, making it the company’s largest regional market.

For the last few years, the world has been in the midst of a major demographic transition, which has affected the world economy. The aging population is one of the most visible global trends

In the second quarter, Lennar’s (LEN) gross margins fell 190 basis points sequentially to 22.7%.

But though millennials may have been born into unlucky economic circumstances, they seem to also be transforming their luck.

With a rise of 7.6% YoY (year-over-year) to $224,000, December 2015 was the 46th consecutive month of YoY increases in median home prices.

All four major regions of the country witnessed substantial increases in home sales in December 2015. The charge was led by the Northeast and Midwest.

The US Dollar Index measures the strength of the US dollar against the other major currencies. It fell by 0.13% on December 22, 2015.

According to the National Association of Home Builders (or NAHB), the housing market index fell by a single point to reach a level of 61.0 in December.

KB Home (KBH) has a market cap of $1.34 billion. After the earnings report in 3Q15, KB Home rose by 1.04% to close at $14.60 per share.

The sales price of units closed or delivered during 2014 was $725,000, up by 13.5% from 2013. This is the highest sales price increase Toll Brothers has witnessed in the past three years.

Lennar (LEN) has a market cap of $10.36 billion. Lennar’s YTD (year-to-date) price movement has a mixed performance with ups and downs.

Toll Brothers’ use of land option agreements reduces financial risks associated with long-term land holdings. The land acquisition strategy of other homebuilders also involves option contracts.

Toll Brothers (TOL) has a very geographically diverse homebuilding operation in the United States. The company has a presence in 50 markets, spanning 19 states as well as the District of Columbia.

Toll Brothers is primarily engaged in the development of attached and detached homes in luxury residential communities. It’s a dominant player in the luxury segment with very few comparable competitors.

Although the majority of Toll Brothers’ (TOL) business is focused on move-up homes, the company also offers second-home, empty-nester, and active-adult product lines to its home buyers in the United States.

The drop in the rental vacancy rate suggests that owning a home still isn’t affordable for many people, despite an economic revival.

Housing starts and building permits figures for July, released by the United States Census Bureau, were highly anticipated by investors in the US real estate sector.