Homebuilder Stocks Fall In Response to Declining Home Sales
Homebuilder Stocks Fall In Response to Declining Home
Sales
US homebuilders saw their stocks drop Tuesday after a closely monitored housing index showed that home prices are still falling in most major US cities. Analysts are expecting price declines to continue into the summer as the industry continues to try and recover from the worst two-year period for US hombuilding since 1959.
The S&P/Case-Shiller index, released Tuesday, showed that home prices fell in 19 of the nation's 20 largest cities from December to January. It was the sixth consecutive monthly decline reported by the group. Most of the 20 cities detailed in the index have seen prices drop all the way down to 2003 levels, when the last housing boom was getting underway. In four of the twenty, Atlanta, Las Vegas, Detroit, and Cleveland, prices have reached 11-year lows.
The index trailed a separate report from the US Commerce Department on Friday that showed sales of new homes fell for the third straight month in February. Analysts were able to find some positive news in the S&P/Case-Shiller index, however. After seasonal adjustments are factored into the data, only 12 of the 20 cities saw a decline in average home value, compared to 19 of 20 three months ago. The data, some optimistic analysts suggest, suggest that a partial recovery is underway.
The housing market has lagged behind the broader economy in recovering from the nation's worst economic downturn since the Great Depression, especially since the expiration of federal tax credits for homebuyers last May.
Among US homebuilders, Lennar Corp. saw the biggest stock decline following the report with its shares dropping 68 cents in Tuesday's session, or 3.4 percent, to close at $19.07. Other major US homebuilders saw stock declines of about 2 percent, lagging behind the broader S&P 500, which gained about 0.7 percent on the day.
US homebuilders saw their stocks drop Tuesday after a closely monitored housing index showed that home prices are still falling in most major US cities. Analysts are expecting price declines to continue into the summer as the industry continues to try and recover from the worst two-year period for US hombuilding since 1959.
The S&P/Case-Shiller index, released Tuesday, showed that home prices fell in 19 of the nation's 20 largest cities from December to January. It was the sixth consecutive monthly decline reported by the group. Most of the 20 cities detailed in the index have seen prices drop all the way down to 2003 levels, when the last housing boom was getting underway. In four of the twenty, Atlanta, Las Vegas, Detroit, and Cleveland, prices have reached 11-year lows.
The index trailed a separate report from the US Commerce Department on Friday that showed sales of new homes fell for the third straight month in February. Analysts were able to find some positive news in the S&P/Case-Shiller index, however. After seasonal adjustments are factored into the data, only 12 of the 20 cities saw a decline in average home value, compared to 19 of 20 three months ago. The data, some optimistic analysts suggest, suggest that a partial recovery is underway.
The housing market has lagged behind the broader economy in recovering from the nation's worst economic downturn since the Great Depression, especially since the expiration of federal tax credits for homebuyers last May.
Among US homebuilders, Lennar Corp. saw the biggest stock decline following the report with its shares dropping 68 cents in Tuesday's session, or 3.4 percent, to close at $19.07. Other major US homebuilders saw stock declines of about 2 percent, lagging behind the broader S&P 500, which gained about 0.7 percent on the day.
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