Sector Snap: Homebuilders gain after spring data
Homebuilders stocks get boost from May sales jump, Case-Shiller data, strong Lennar results
NEW YORK (AP) -- Shares of homebuilders got a boost Tuesday after the government reported a big jump in May new home sales and Lennar posted better-than-expected quarterly results.
The Commerce Department said new home sales rose 2.1 percent last month compared with April, to a seasonally adjusted annual rate of 476,000. That's the highest level since July 2008, marking another sign of an industry recovery.
At the same time, the median price of a new home sold in May was $263,900, up 3.3 percent from a year ago.
Meanwhile, Lennar posted fiscal second-quarter adjusted earnings and revenue that beat Wall Street expectations, while its new orders and deliveries continued to climb.
Lennar Corp. sells homes for entry level and move-up buyers, as well as retirees.
CEO Stuart Miller said demand in all of the company's housing markets continues to outpace supply, which is being constrained due to limited land availability and fewer competing homebuilders. While interest rates are rising, Miller said there so far seems to be little impact on home sales or pricing.
U.S. sales of new homes remain below the 700,000 annual pace that's considered healthy by most economists. But the pace has increased 29 percent from a year ago.
Separately, the Standard & Poor's/Case-Shiller 20-city home price index released Tuesday found that U.S. home prices jumped 12.1 percent in April from a year ago, the most since March 2006. Prices rose from a year earlier in all 20 cities for the fourth straight month, and rose in all cities except Detroit in April from March.
Analysts say the housing recovery is looking more sustainable and should continue to boost economic growth this year, offsetting some drag from higher taxes and federal spending cuts.
Here's how shares of some homebuilders were trading Tuesday morning:
— Lennar, up 99 cents, or 2.8 percent, to $35.98.
— Standard Pacific Corp., up 35 cents, or 4.5 percent, to $8.33.
— KB Home, up 64 cents, or 3.3 percent, to $19.89.
— PulteGroup, up 96 cents, or 5.2 percent, to $19.27.
— Hovnanian Enterprises Inc., up 25 cents, or 4.7 percent, to $5.61.
— Comstock Holding Cos., up 7 cents, or 2.7 percent, to $2.68.
— Toll Brothers Inc., up 77 cents, or 2.4 percent, to $32.62.
— Meritage Homes Corp., up $1.75, or 4.1 percent, to $44.44.
