This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Homebuilders' Shares Hit by Home-Sales Drop

Existing-home sales may have declined and the inventory of unsold homes on the market may have increased in July. But as any bull on housing will tell you, the housing market remains red-hot.

Pundits and stock pushers will also tell you that because everyone's talking about the housing bubble -- and about how it's seemingly deflating a bit -- then it's not really happening, and there's nothing to worry about. Hmm, if that doesn't sound like delusion, then what does?

The denial is more acute as there may be signs that the smart money is bailing out of housing stocks. Taking a look at the Philadelphia Stock Exchange Housing Index since late July, it's hard not to notice the downtrend. After hitting an all-time high of 586.06 on July 28, the index has fallen nearly 10% through Monday's close.

The housing index was recently down another 1.6% Tuesday after the National Association of Realtors said existing-home sales dropped 2.6% in July to 7.16 million, compared with economists' average forecast that sales would fall only 1.1%. Among larger names in the sector, Beazer Homes (BZH - Get Report), KB Homes (KBH - Get Report), Lennar (LEN - Get Report) and Toll Brothers (TOL - Get Report) were each recently down more than 2%.

The housing news also led to weakness in the broad averages, with the Dow Jones Industrial Average recently down 54.53 points, or 0.52%, to 10,515.36. The S&P 500 was off 5.76 points, or 0.47%, to 1215.97. The Nasdaq Composite dipped 8.28 points, or 0.39%, to 2133.13.

Looking at the bright side of things, you can say June sales were revised upward to 7.35 million from 7.33 previously, and that the July number was still the third-highest on record.

For the NAR's chief economist, David Lereah, it's only "some air coming of those balloons," which is not the same as a balloon popping.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
BZH $18.89 0.00%
KBH $15.96 0.00%
LEN $52.18 0.00%
TOL $38.89 0.00%
AAPL $122.37 0.00%

Markets

Chart of I:DJI
DOW 17,745.98 -5.41 -0.03%
S&P 500 2,108.63 +0.06 0.00%
NASDAQ 5,128.7850 +17.0520 0.33%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs