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  • uploads///MR consumer sentiment
    Consumer

    Consumer sentiment falls, another warning about the economy?

    The Thomson Reuters/University of Michigan Consumer Confidence Index is a leading indicator for the U.S. economy The Thomson Reuters/University of Michigan Consumer Confidence Index is an important indicator of the consumer’s perception of the U.S. economy. Similar to other consumer confidence measures, it asks consumers about their views on the current economic conditions and their […]

    By Brent Nyitray, CFA, MBA
  • uploads///Distressed Sales
    Consumer

    Distressed Home Sales Fall

    Distressed Home sales are tracked by CoreLogic in their monthly Market Pulse Distressed Sales and shadow inventory are closely related. Distressed sales include Real Estate Owned (REO) and short sales. REO sales are generally foreclosures, while short sales are below the current outstanding debt on the property. Distressed supply will put a damper on pricing as […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR Retail Sales
    Consumer

    Retail sales increase 0.2% in July, homebuilder opportunity ahead

    Retail sales data gives analysts insight into the strength of the consumer Consumption is the biggest driver of the U.S. economy and accounts for 70% of GDP. Consumption has been relatively subdued since the recession began, as Americans have boosted their savings rate and spent only on essentials. The real estate bubble drove consumption in […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR IBD TIPP
    Consumer

    Economic optimism rebounds, but it still remains depressed

    The IBD/TIPP Optimism Index increased by 3 points to 41.4 versus 38.4 in October. It’s well below its 12-month average of 45.

    By Brent Nyitray, CFA, MBA
  • uploads///MR KBH
    Consumer

    KB Home swings to a profit and its turnaround stays on pace

    Unlike some of the other builders, KB is a turnaround story. The company believes its strategic focus on first-time and move-up homebuyers is finally beginning to pay off.

    By Brent Nyitray, CFA, MBA
  • uploads///ISM PMI
    Consumer

    ISM manufacturing survey shows more manufacturing expansion

    Overall increases in business activity and consumption are starting to drive more business for homebuilders.

    By Brent Nyitray, CFA, MBA
  • uploads///Unemployment Rate
    Consumer

    Why the FOMC minutes and weak payroll data drove REITS and builders

    Last week, we had two important data points with the FOMC minutes from the December meeting and the Employment Situation report on Friday.

    By Brent Nyitray, CFA, MBA
  • uploads///Business Inventories
    Consumer

    Business inventories rise slower than sales, good for activity

    This series focuses on industrial and manufacturing releases that will affect the real estate sector. Since homebuilders are highly cyclical, housing analysts watch the manufacturing data closely.

    By Brent Nyitray, CFA, MBA
  • uploads///MR PPI
    Consumer

    Why the Producer Price Index increasing 0.8% in June will hurt homebuilders

    The Producer Price Index measures inflation at the wholesale level Analysts have typically taken inflation at the wholesale level to predict inflation at the consumer level. In a normal business environment, producers pass these increased costs to consumers, which would decrease disposable income if wages didn’t rise accordingly. Investors consider a little inflation a good thing. […]

    By Brent Nyitray, CFA, MBA
  • uploads///Foreclosure Starts
    Consumer

    Why foreclosure starts ticked up in October but are still falling

    Foreclosure starts are closely watched by investors, realtors, and homebuilders alike because they forecast future housing supply.

    By Brent Nyitray, CFA, MBA
  • uploads///CoreLogic Home Price Index  year
    Consumer

    Must-know: Home prices increase 7.4% YoY

    The 7.4% year-over-year (or YoY) gain resembles the gains we saw during the bubble years. On a month-over-month basis, the increase was only 1.2%. It was decent. The prices for ex-distressed sales increased 6.8%. Prices are still 11.9% below their peak in April 2006.

    By Brent Nyitray, CFA, MBA
  • Weekly economic recap: why REITs are crushed while homebuilding is bullish
    Consumer

    Weekly economic recap: why REITs are crushed while homebuilding is bullish

    The ten-year bond is the basis for all mortgage pricing Long-term interest rates are priced off the benchmark long-term bond, which is the ten-year Treasury. These days, the ten-year bond reacts to economic data through the Federal Reserve’s asset purchase program, also known as quantitative easing (QE). As a general rule, economic data that shows […]

    By Brent Nyitray, CFA, MBA
  • uploads///Bloomberg Consumer Comfort
    Consumer

    Bloomberg consumer comfort index hits a post-recession high, good for homebuilders

    The Bloomberg Consumer Comfort Index rose to -28.3 for the week ending June 23 The Bloomberg Consumer Comfort Index is a weekly sentiment index that covers three critical variables: respondents’ perception of the state of the economy, their evaluation of their personal finances, and whether it’s a good time to purchase goods and services. The […]

    By Brent Nyitray, CFA, MBA
  • uploads///Home Equity
    Consumer

    Aggregate home equity increases 9% in Q113

    Corelogic puts out a quarterly report on aggregate home equity in the U.S. Corelogic’s Home Equity Report analyzes changes in home equity from a number of different perspectives. Home equity can be used to predict default rates, and we saw a large number of strategic defaults early in the housing bust as professional investors realized […]

    By Brent Nyitray, CFA, MBA
  • New York PMI falls in May
    Consumer

    New York PMI falls in May

    The Institute of Supply Management index assesses the state of manufacturing in the New York City Metropolitan Area The Institute of Supply Management (ISM) New York Purchasing Manager’s Index (PMI) is similar to the ISM PMI , however, it covers the New York City area. The ISM PMI looks at various business indices, like new […]

    By Brent Nyitray, CFA, MBA
  • uploads///NAHB Housing Market Index
    Consumer

    Why homebuilder sentiment hits post-bubble highs, helping stocks

    Homebuilders are in a better position than the smallest construction firms in that they have easy access to credit.

    By Brent Nyitray, CFA, MBA
  • uploads///ISM PMI
    Consumer

    ISM PMI shows manufacturing back in expansionary territory

    The Institute for Supply Management Index assesses the state of manufacturing in the United States. The Institute for Supply Management Purchasing Manager’s Index (ISM PMI for short) is similar to the other regional PMI indices, however, it covers the entire country. The ISM PMI looks at various business indices, like new orders, production, employment, supplier […]

    By Brent Nyitray, CFA, MBA
  • uploads///Foreclosure Completions
    Consumer

    August foreclosure completions tick up but homebuilders unaffected

    Increases in foreclosure activity correlate with lower home prices because distressed properties tend to trade at a discount to non-distressed properties.

    By Brent Nyitray, CFA, MBA
  • uploads///KB Home EPS
    Earnings Report

    What Happened to KB Home’s Earnings in 2Q16?

    KB Home’s net income came in at $15.6 million on a GAAP (generally accepted accounting principles) basis, as compared to $9.6 million in 2Q15.

    By Brent Nyitray, CFA, MBA
  • uploads///Homeownership Rate
    Consumer

    Why the homeownership rate has declined to 65% in this recession

    The homeownership rate rose precipitously during the housing bubble. This was due to several reasons.

    By Brent Nyitray, CFA, MBA
  • uploads///CFNAI
    Consumer

    The Chicago Fed National Activity Index shows economic expansion

    The Chicago Fed National Activity Index measures whether the economy is expanding on, above, or below its historical trend.

    By Brent Nyitray, CFA, MBA
  • uploads///Construction Spending
    Consumer

    Construction spending ticks up in April

    Construction spending is a major driver of job growth in the U.S. economy The Construction Put in Place Survey is released monthly by the Census Bureau that measures the total dollar value of construction work done in the U.S. It covers both the public and private sector and includes new structures as well as improvements […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR household formation
    Consumer

    Why household formation drives homebuilder demand (Part 1)

    Low household formation numbers over the past five years will drive homebuilder demand going forward Since the financial crisis began, demand for new construction has fallen, as household formation numbers have dropped. The low household formation numbers have been driven by a poor economy—not by demographics. This represents pent-up demand that must be satisfied in […]

    By Brent Nyitray, CFA, MBA
  • uploads///Housing starts
    Consumer

    Housing starts rebound, driven by multi-family construction

    Housing starts are a critical predictor of future homebuilder sales Housing starts are released jointly by the Census Bureau and the Department of Housing and Urban Development. Analysts use the information to anticipate future production for homebuilders, future demand for raw materials, and labor costs. This data will even affect the forecasts for home-related retailers, […]

    By Brent Nyitray, CFA, MBA
  • uploads///Empire State Manufacturing Survey
    Consumer

    Empire State Manufacturing Index improves, outlook remains bright

    Overall, the report shows the economy is still expanding moderately, and firms are generally optimistic about the future.

    By Brent Nyitray, CFA, MBA
  • uploads///tom rumble lvzopTxjOU unsplash
    Consumer

    Federal Reserve forecasts 2.55% GDP growth in 2013

    The Federal Reserve includes formal economic forecasts like GDP in the minutes from its Federal Open Market Committee (or FOMC) meetings.

    By Brent Nyitray, CFA, MBA
  • uploads///FICO scores
    Consumer

    Is credit finally starting to ease up in the mortgage market?

    Ellie Mae is a software provider that aggregates mortgage origination activity Ellie Mae (ELLI) puts out a monthly Origination Insight Report which provides monthly data and analysis from a sample of closed loan applications that flow through their Encompass 360 Mortgage Management Software. In many ways, it is similar to the way Automatic Data Processing […]

    By Brent Nyitray, CFA, MBA
  • uploads///New Home Sales  year
    Consumer

    New home sales increase 29% from a year ago, positive for homebuilder stocks

    May new home sales, as reported by the Census Bureau and the Department of Housing and Urban Development, increased 2.1% from April New home sales increased to an annualized pace of 454,000, up 2.3% from April (which was revised upward from an initial estimate of 454,000 to 466,000) and up 29% from a year ago. […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR CPI
    Consumer

    Why the subdued Consumer Price Index gives the Fed an excuse

    This report will probably hold the hawks on the Fed at bay and allow them to continue to maintain ultra-low interest rates. That said, the bond market has been pricing in a tapering of quantitative easing.

    By Brent Nyitray, CFA, MBA
  • uploads///MBA Purchase Index
    Consumer

    Why the MBA Purchase Index fell but housing remains affordable

    The MBA Purchase Index fell by 0.4% last week, which is somewhat surprising given that rates fell and even refinances rose.

    By Brent Nyitray, CFA, MBA
  • uploads///nfpvadp
    Consumer

    Can Investors Keep Forecasting the Final Non-Farm Payroll Correctly?

    ADP’s June non-farm payroll numbers indicated an increase of 172,000 jobs in the private sector. ADP’s non-farm payrolls have been mostly accurate.

    By David Meyer
  • uploads///MR Michigan
    Consumer

    Consumer confidence dipped slightly in July, but opportunity for homebuilders

    The Thomson Reuters/University of Michigan Consumer Confidence Index is a leading indicator for the U.S. economy The Thomson Reuters/University of Michigan Consumer Confidence Index is an important indicator of the consumer’s perception of the U.S. economy. Similar to other consumer confidence measures, it asks consumers about their views on the current economic conditions and their […]

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield historical
    Consumer

    Week in review: Bonds fell slightly as the government shut down

    The ten-year bond is the basis for all mortgage pricing Long-term interest rates are priced off the benchmark long-term bond, which is the ten-year Treasury. These days, the ten-year bond reacts to economic data through the Federal Reserve’s asset purchase program, also known as quantitative easing (or QE). As a general rule, economic data that shows […]

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield LT
    Consumer

    What to watch for in real estate, stormy week ahead

    After a stormy week, bonds have a lot of data to navigate Last Friday’s jobs report punctuated what should have been a relatively dull week with a holiday in the middle. The 10 year bond sold off on the number, increasing the yield from 2.5% to 2.74%. We will see Monday if that move was overdone. […]

    By Brent Nyitray, CFA, MBA
  • uploads///Foreclosure Completions
    Consumer

    Foreclosure completions drop again in April

    Foreclosure starts are a leading indicator of future housing supply and pricing Foreclosure activity is closely watched by investors, realtors and home builders alike because they provide a forecast of future housing supply. Foreclosure timelines can vary widely by state, depending on whether a foreclosure needs to be approved by a judge. The large foreclosure […]

    By Brent Nyitray, CFA, MBA
  • uploads///Housing starts
    Consumer

    Week in preview: Why the Fed will be in the spotlight

    Next week is all about the FOMC (Federal Open Market Committee) meeting The FOMC meets on Tuesday and Wednesday, and we should have the announcement on Wednesday afternoon around 2:00 p.m. Taper? By how Much? Which securities? The Fed will also release its forecast of economic activity. The Fed has been consistently over-optimistic on economic […]

    By Brent Nyitray, CFA, MBA
  • uploads///MR consumer credit
    Consumer

    Consumer credit increases in August, good for homebuilder stocks

    Consumer credit increased $13.6 billion (or 5.4% annualized) in August, as non-revolving credit increased 8.0% and revolving credit fell 1.2%.

    By Brent Nyitray, CFA, MBA
  • uploads///MR Richmond Fed
    Consumer

    Richmond Fed Manufacturing Survey dives in July, homebuilders unaffected

    The Richmond Fed Manufacturing Survey looks at business conditions in the Fed’s fifth district, which covers Washington, DC, Baltimore, Richmond, and Charlotte The Richmond Fed Manufacturing Survey is sent out to companies in the Mid-Atlantic states and covers current business conditions, shipments, new orders, backlog, and inventory. It’s similar to the other surveys put out […]

    By Brent Nyitray, CFA, MBA
  • uploads///tom rumble lvzopTxjOU unsplash
    Consumer

    Real Estate Price Appreciation widely dispersed by location

    The Zillow Home Value Index (ZHVI) rose 5.1% year-over-year to $157,600. The ZHVI is a modeled index, based on the average zillow estimate of home values in each area. The Zillow index is not solely based on home sales, so it isn’t really a comparable index to Case-Schiller. It is closer to Radar Logic, which […]

    By Brent Nyitray, CFA, MBA
  • uploads///CoreLogic Home Price Index  year
    Consumer

    The CoreLogic Index shows home price appreciation is decelerating

    The CoreLogic Index is a widely followed index of real estate values. Unlike the other major indices—like Case-Shiller or Radar Logic—CoreLogic separates distressed sales from non-distressed sales.

    By Brent Nyitray, CFA, MBA
  • uploads///MBA Purchase Index
    Consumer

    Homebuilder opportunity: Mortgage purchase applications fall, but still strong

    The MBA Purchase Index is an important index that forecasts housing activity The Mortgage Bankers Association (MBA) index of purchase activity measures application activity, not loans made. The Mortgage Bankers Association samples roughly 75% of all mortgage activity in the U.S., and its indices are key indicators for the real estate finance market and home […]

    By Brent Nyitray, CFA, MBA
  • uploads/// year bond yield historical
    Consumer

    What exactly is quantitative easing? Part 5

    Back to part 4 Mark-to-market issues The Fed does actually have a profit and loss statement and it is a line item on the Federal Budget. Since quantitative easing began, the Fed has profited from this activity as it has pushed up prices through its own buying. As it stops purchasing MBS and Treasuries, it […]

    By Brent Nyitray, CFA, MBA
  • uploads///Consumer Sentiment
    Consumer

    University of Michigan Consumer Confidence Index dips in August

    The Thomson Reuters/University of Michigan Consumer Confidence Index is a leading indicator for the U.S. economy The Thomson Reuters/University of Michigan Consumer Confidence Index is an important indicator of the consumer’s perception of the U.S. economy. Similar to other consumer confidence measures, it asks consumers about their views on the current economic conditions and their […]

    By Brent Nyitray, CFA, MBA
  • uploads///ISM PMI
    Consumer

    Institute of Supply Management’s Purchasing Managers Index falls in April

    The Institute of Supply Management index assesses the state of manufacturing in the United States. The Institute of Supply Management (ISM) Purchasing Manager’s Index (PMI) is similar to the other regional PMI indices, however it covers the entire country. The ISM PMI looks at various business indices like new orders, production, employment, supplier deliveries, inventory, […]

    By Brent Nyitray, CFA, MBA
  • uploads///GDP
    Consumer

    First quarter GDP revised downward to +2.4%

    Increases in Gross Domestic Product (GDP) is a measure of economic growth Gross domestic product is what is referred to generally as “the economy.”  It is the sum of consumption, investment, and government spending. Another way to think of GDP is the output of goods and services produced by labor and property in the U.S. […]

    By Brent Nyitray, CFA, MBA
  • uploads///Industrial Production
    Consumer

    Industrial production rebounds in August, good for homebuilders

    Industrial production is a bellwether of economic activity Industrial production is a good top-down macroeconomic indicator that helps forecast the labor market, final demand, consumption, and inflation. While manufacturing is no longer the primary driver of the U.S. economy, it still influences the economy to a large degree—particularly for unskilled workers. U.S. manufacturing has been […]

    By Brent Nyitray, CFA, MBA
  • uploads///KB Home Revenue
    Earnings Report

    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.

    By Brent Nyitray, CFA, MBA
  • uploads///MBA Mortgage Apps
    Consumer

    Why you should follow the Mortgage Bankers Association (MBA) Index

    Every week, the Mortgage Bankers Association (MBA) puts out an index of mortgage application activity Mortgage applications are relevant to a number of industries—from banks to non-banks, to mortgage REITs to homebuilders. This series will break down the different indices and help you learn what insight you can glean from them. If you’re a bank, […]

    By Brent Nyitray, CFA, MBA
  • uploads///Senior LO Survey
    Consumer

    Why credit is still easing but subprime is gone from the banks

    Credit eased during the quarter, but it was primarily associated with commercial real estate and commercial or industrial lending.

    By Brent Nyitray, CFA, MBA
  • uploads///Pending Home Sales
    Consumer

    A lack of first-time buyers: Pending home sales fall again

    The return of the first-time homebuyer is the missing link to a more normal housing market. Household formation numbers have been depressed since the Great Recession began.

    By Brent Nyitray, CFA, MBA
  • uploads///Housing Starts
    Consumer

    Housing starts dampened by wet weather in the Midwest

    Housing starts are a critical predictor of future home builder sales Housing starts are released jointly by the Census Bureau and the Department of Housing and Urban Development. Analysts use the information to anticipate future production for home builders, future demand for raw materials, and labor costs. This data will even affect the forecasts for […]

    By Brent Nyitray, CFA, MBA
  • uploads///Philly Fed
    Consumer

    Philly Fed Index drops after huge months, but outlook optimistic

    The Philadelphia Fed Survey is an important survey about economic expectations in the Mid-Atlantic region The diffusion index is based on the number of businesses reporting increased activity less the number of businesses reporting decreased activity. It also includes an index of expectations six months out. The survey drills down into orders and shipments, employment, […]

    By Brent Nyitray, CFA, MBA
  • uploads///NAHB Housing Market Index
    Consumer

    Homebuilder sentiment dips as traffic slows and shutdown persists

    Builders noted the shutdown and the impending debt ceiling have depressed consumer confidence, and this is flowing through to traffic.

    By Brent Nyitray, CFA, MBA
  • uploads///MR pending home sales
    Consumer

    Pending home sales declined in August as mortgage rates increased

    The Pending Home Sales Index (PHSI), a proprietary index from the National Association of Realtors based on contract signings, fell 1.5%, to 107.7 in August from 109.4 in July.

    By Brent Nyitray, CFA, MBA
  • uploads///mortgage rate long term
    Consumer

    Bernanke’s comments send mortgage rates screaming higher

    The recent bond market sell-off bumps up mortgage rates again Mortgage rates are the lifeblood of the housing market, which is why Bernanke and the Fed began conducting quantitative easing (or QE) in the first place. Lower rates allow homeowners to refinance, which increases their disposable income and helps stimulate economic growth. Lower rates enable first-time home […]

    By Brent Nyitray, CFA, MBA
  • uploads///joy revenues trend
    Basic Materials

    How Joy Global Is Trying to Stop Bleeding Revenues

    Joy Global’s (JOY) fiscal 1Q16 revenues came in at $526 million, which represents a 25% decline over fiscal 1Q15.

    By Jessica Stephans
  • uploads///Fed Assets
    Consumer

    Must-know: The Fed reduces asset purchases by another $10 billion

    Yesterday, the Federal Reserve ended its January Federal Open Market Committee meeting and decided to continue to reduce asset purchases. This was Ben Bernanke’s final FOMC meeting.

    By Brent Nyitray, CFA, MBA
  • uploads///IBD TIPP Optimism Index
    Consumer

    IBD / TIPP economic optimism index falls in July, but don’t blame interest rates

    The Investor’s Business Daily/TechnoMetrica Optimism Index is considered to be a preview of the upcoming consumer confidence indices The Investor’s Business Daily/TechnoMetrica Optimism Index has a good track record of predicting how the two major consumer confidence indices – the Conference Board and the University of Michigan Consumer Confidence indices – will look when they are released later in […]

    By Brent Nyitray, CFA, MBA
  • uploads///Richmond Fed
    Consumer

    Mid-Atlantic manufacturing is picking up, helping homebuilders

    The Richmond Fed Manufacturing Survey looks at business conditions in the Fed’s fifth district, which covers Washington, DC, Baltimore, Richmond, and Charlotte.

    By Brent Nyitray, CFA, MBA
  • uploads///Unemployment rate LT
    Consumer

    Week in review: Why a lousy jobs report is a bond rally catalyst

    The ten-year bond is the basic driver of REITs and also the homebuilders Long-term interest rates are priced off the benchmark long-term bond, which is the ten-year Treasury. These days, the ten-year bond reacts to economic data through the Federal Reserve’s asset purchase program, also known as quantitative easing (or QE). As a general rule, […]

    By Brent Nyitray, CFA, MBA
  • uploads///living room _
    Consumer

    What Happened to KB Home’s Earnings in Q2?

    KB Home stock fell nearly 13% in extended trading on Wednesday. The company posted its second-quarter earnings after the markets closed.

    By Ambrish Shah
  • uploads///MBA Purchase Index
    Consumer

    Purchase Applications Increase As Low Rates Get Homebuyers Active

    The Mortgage Bankers Association (or MBA) Purchase Index increased 23.6% in the week ended January 9 as global bond markets rallied.

    By Brent Nyitray, CFA, MBA
  • uploads///Mortgage Rates
    Consumer

    Mortgage Rates Fall Again As The 10-Year Rallies

    The rally in bonds has been an unexpected gift to cap off what was otherwise a dismal year in mortgage banking.

    By Brent Nyitray, CFA, MBA
  • Consumer

    Refinancing deals continue to top the high yield bond scoreboard

    Refinancing deals allow issuers or corporations to raise additional funds to meet maturing debt obligations or to replace existing high-cost debt with a new low-cost debt.

    By Sandra Nathanson
  • uploads///Bloomberg Consumer Comfort
    Consumer

    Bloomberg Consumer Comfort Index falls in the week ending May 5

    The Bloomberg Consumer Comfort Index fell to -29.5 for the week ending May 5th The Bloomberg Consumer Comfort Index is a weekly sentiment index that covers three critical variables: the respondent’s perception of the state of the economy, their evaluation of their personal finances, and whether it is a good time to purchase goods and […]

    By Brent Nyitray, CFA, MBA
  • uploads///Screen Shot    at
    Company & Industry Overviews

    KB Home SVP Talks Smart Homes of the Future

    In this interview, KB Home SVP Dan Bridleman discusses the smart home of tomorrow and how the company is making homes the center of a smart ecosystem.

    By Ken Pyle
  • uploads///
    Consumer

    Housing Market: What a Rise in Building Permits Signals

    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.

    By Ricky Cove
  • uploads///
    Consumer

    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.

    By Ricky Cove
  • uploads///
    Consumer

    Is the Drop in September Building Permits Cause for Concern?

    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.

    By Ricky Cove
  • uploads///
    Consumer

    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.

    By Ricky Cove
  • uploads///Housing starts
    Consumer

    How the Hot Rental Market Contributed to Housing Starts

    In June 2016, housing starts rose from 1.1 million to ~1.2 million. We also saw increases in both single-family and multifamily starts.

    By Brent Nyitray, CFA, MBA
  • uploads///Lennar Gross Margins
    Earnings Report

    Why Lennar’s Focusing More on First-Time Buyers

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

    By Brent Nyitray, CFA, MBA
  • uploads/// median prices
    Macroeconomic Analysis

    Median Existing Home Prices Are Rising Higher and Higher

    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.

    By Peter Barnes
  • uploads/// region
    Macroeconomic Analysis

    Existing Home Sales: Northeast and Midwest Led the Charge

    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.

    By Peter Barnes
  • uploads///Chart  EV to EBITDA
    Company & Industry Overviews

    Insights from Toll Brothers’ EV-to-EBITDA Multiple

    A closer look at Toll Brothers’ (TOL) EV-to-EBITDA multiple shows that the company is currently at the lower end of its historical valuation.

    By Peter Barnes
  • uploads///len pm
    Earnings Report

    New Homes Boost Lennar’s Performance

    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.

    By Gabriel Kane
  • uploads///Term Premium on Ten Year Security
    Macroeconomic Analysis

    What Does US Term Premium Indicate?

    Over an eight-year period, the term premium on a ten-year US security rose to 3.25% in October 2008. It saw a low of -0.37% in January 2015.

    By David Ashworth
  • uploads///Chart  Cost breakdown
    Company & Industry Overviews

    What Was D.R. Horton’s Cost Structure Breakdown in 2014?

    Cost of homes sold is the highest of the company’s costs at 78.1%, followed by SG&A at 10.6%, and cost of land sold at 1.6%.

    By Peter Barnes
  • uploads///Chart  land strategy
    Company & Industry Overviews

    Understanding D.R. Horton’s Land Acquisition Strategy

    D.R. Horton directly acquires almost all of its land and lot positions. The company has initiated few joint ventures for land acquisitions.

    By Peter Barnes
  • uploads///Nonfarm Payrolls
    Macroeconomic Analysis

    June Payrolls Increase

    Private payrolls increased by 223,000 in June, while government jobs growth was flat and manufacturing employment barely increased.

    By Brent Nyitray, CFA, MBA
  • uploads///Chart  Construction spending
    Macroeconomic Analysis

    Higher Residential Construction Spending Keeps Sector Going

    Spending on private construction, which accounts for more than 71.8% of all construction spending, fell 0.5% in January.

    By Peter Barnes
  • uploads///Exisiting Home Sales
    Macroeconomic Analysis

    Existing Home Sales Rose in February 2015

    Existing home sales are computed and reported monthly by the NAR. Existing home sales account for nearly 90% of all the house purchases in the US.

    By David Ashworth
  • uploads///Mortgage Rates in the US
    Macroeconomic Analysis

    Why Charles Evans Supports Delaying a Rate Hike in 2015

    Charles Evans, the Chief of the Chicago Fed, estimates that the PCE (Personal Consumption Expenditures) price index will rise to 2% only by 2018.

    By David Ashworth
  • uploads///Chart  Rental vacancy
    Macroeconomic Analysis

    Low Rental Vacancy Rate Pushes Builders into the Market

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

    By Peter Barnes
  • uploads///Chart
    Company & Industry Overviews

    Valuing homebuilders: Buying at the right price

    Homebuilders earn substantial profits buying land at a cheaper rate, allowing it to appreciate over time, constructing a house on it, and selling it.

    By Peter Barnes
  • uploads///Chart
    Company & Industry Overviews

    Investing in the top homebuilders in the US

    In this article, we’ll run through the top homebuilders in the US. The SPDR S&P Homebuilders ETF (XHB) has a 33.5% stake in major homebuilders.

    By Peter Barnes
  • uploads///Chart
    Company & Industry Overviews

    The basics of the US homebuilding industry for investors

    The US homebuilding industry comprises many large, publicly traded residential construction companies. Top homebuilders mainly focus on specific categories.

    By Peter Barnes
  • uploads///IBD TIPP Optimism Index
    Consumer

    Understanding the key to consumer confidence for homebuilders

    Consumption is the major driver of the U.S. economy. It accounts for 70% of GDP. Consumption has been relatively subdued since the recession began, as Americans have boosted their savings rate and spent only on essentials.

    By Brent Nyitray, CFA, MBA
  • uploads///Housing starts
    Consumer

    A critical predictor: Housing starts rise back above 1 million

    Homebuilder earnings season is over. The builders generally increased their top lines by raising prices, not by selling more units. If anything, a typical report would be a 12% increase in ASPs (average selling prices) and a 10% drop in deliveries.

    By Brent Nyitray, CFA, MBA
  • uploads///SPF Basics
    Consumer

    Standard Pacific Homes’ background affects its 2Q14 earnings

    Founded in 1965, Standard Pacific (SPF) is a Southern California–based builder with operations in California, Florida, the Carolinas, Texas, Arizona, and Colorado.

    By Brent Nyitray, CFA, MBA
  • uploads///GDP
    Consumer

    Why the FOMC and earnings drove bonds, REITs, and builders

    Last week had some important data points with the FOMC meeting and also some key economic reports. The Fed decided to make another reduction in asset purchases.

    By Brent Nyitray, CFA, MBA
  • uploads///New Home Sales  year
    Consumer

    Are falling new home sales in December a warning for 2014?

    Homebuilders like PulteGroup (PHM) and DR Horton (DHI) will report fourth quarter and full year earnings this week. Reports noted particular strength in the West Coast.

    By Brent Nyitray, CFA, MBA
  • uploads///Homeownership Rate
    Consumer

    Why the key to the recovery is the first-time homebuyer

    The first-time homebuyer has had a number of big issues to contend with. The biggest one has been a lousy job market for recent college graduates.

    By Brent Nyitray, CFA, MBA
  • uploads///KB Home Geographic Expposure
    Consumer

    A key advantage: Why KB Home is situated in attractive markets

    KB Home (KBH) is a Los Angeles–based homebuilder that focuses on first-time, move-up, and active adult homebuyers. Its price point is at the low end.

    By Brent Nyitray, CFA, MBA
  • uploads///Retail Sales
    Consumer

    Why bonds sold off on stronger economic data and a hawkish Fed

    The Fed’s economic outlook remained relatively constructive and it set the stage for a December taper.

    By Brent Nyitray, CFA, MBA
  • uploads///Unemployment Rate
    Consumer

    Week in Review: Jobs, REIT earnings, and key homebuilder mergers

    Last week, we had some important data points—with the advance estimate for third quarter GDP and the all-important jobs report.

    By Brent Nyitray, CFA, MBA
  • uploads///MR unemployment rate LT
    Consumer

    Insured unemployed and initial jobless claims predict unemployment

    The insured unemployment rate The insured unemployment rate is the number of unemployed people who are eligible for unemployment insurance. These people are the most recently laid-off and therefore have the freshest skills. A drop in the insured unemployment rate is the strongest predictor of a drop in the future unemployment rate. This makes sense, […]

    By Brent Nyitray, CFA, MBA
  • Consumer

    Week in preview: Expect two big homebuilder earnings reports

    Next week is all about the FOMC (Federal Open Market Committee) meeting The FOMC meets on Tuesday and Wednesday, and we should have the announcement on Wednesday afternoon around 2:00 p.m. Taper? By how Much? Which securities? The Fed will also release its forecast of economic activity. The Fed has been consistently over-optimistic on economic growth, and […]

    By Brent Nyitray, CFA, MBA
  • uploads///Great Depression Bear
    Consumer

    Comparing the Great Depression’s housing bear market with today’s

    The real estate bubble of the 2000s was bigger than the real estate bubble of the 1920s In many ways, the dual stock market and real estate bubbles of the 1920s were a mirror image of the 2000s market collapse. The 1920s real estate boom peaked in 1925, and the stock market collapsed four years […]

    By Brent Nyitray, CFA, MBA
  • uploads///Real Estate Bubbles
    Consumer

    Comparing the 1920s and 2000s real estate bubbles

    The real estate bubble of the 2000s was bigger than the real estate bubble of the 1920s In many ways, the dual stock market and real estate bubbles of the 1920s were a mirror image of the 2000s market collapse. The 1920s real estate boom peaked in 1925, and the stock market collapsed four years […]

    By Brent Nyitray, CFA, MBA
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