Sector Snap: Homebuilders Slip On Housing Data

NEW YORK (AP) — Shares of U.S. homebuilders dropped more deeply than broader markets Tuesday after the government released a report on housing that boded ill for future construction.

The Commerce Department said work on new homes and apartments rose 0.5 percent last month to a seasonally adjusted annual rate of 590,000 units — weaker than economists expected.

Worse, new applications for building permits, considered a sign of future construction, fell 1.2 in September. That's the largest drop in five months.

Also weighing on homebuilders' shares are worries about the expiring federal tax credit of up to $8,000 for first-time homebuyers. It ends on Nov. 30. Real estate trade associations and many economists are worried that without an extension of the credit, the country could see a slowdown or stop in the nascent housing recovery.

On Monday, the National Association of Home Builders said its index measuring homebuilders' confidence slipped in October, the first dip since June.

Shares of Pulte Homes Inc. fell 34 cents, or 3.2 percent, to $10.27; Lennar Corp. dropped 32 cents, or 2.2 percent, to $14.07; Toll Bros. Inc. lost 22 cents, or 1.1 percent, to $19.04; DR Horton Inc. slipped 15 cents, or 1.2 percent, to $12.10; Hovnanian Enterprises Inc. slipped 2 cents to $3.92; KB Home shed 16 cents, or 1 percent, to $15.30.