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
TheStreet Open House

Homebuilders' Shares Mostly Rise On Housing Data

LOS ANGELES (AP) â¿¿ Shares of homebuilding companies traded mostly higher Tuesday despite a government report that showed builders broke ground on fewer homes in August.

Builders began work on a seasonally adjusted 571,000 homes last month, the Commerce Department said, a 5 percent decline from July and a three-month low. That's less than half the 1.2 million that economists say is consistent with healthy housing markets.

Single-family homes, which represent roughly two-thirds of home construction, fell 1.4 percent.

Still, investors appeared to focus more on the report's building permits data, a gauge of future construction. Building permits increased 3.2 percent last month to an annual rate of 620,000 â¿¿ the highest level in eight months.

Home construction is down nearly 6 percent over the past year. But permits are up nearly 8 percent. That suggests builders aren't working on new homes, but may be preparing to start dormant projects when the economy improves.

A UBS Securities analyst' research note on Tuesday about builder PulteGroup also injected some optimism.

Analyst David Goldberg noted that while the economy appears to be weakening, he believes fundamentals for new homes are at or near a trough.

"While visibility for a turnaround is limited, we believe current valuations for selective builders offer attractive buying opportunities with minimal downside and significant upside potential," Goldberg wrote. He singled out D.R. Horton Inc., Lennar Corp. and Toll Brothers Inc. as his top stock picks among homebuilders.

The new-home market continues to bounce along the bottom, weighed down by weak consumer confidence, high unemployment, competition from foreclosures and tight mortgage lending standards.

At the start of the year, some forecasts called for improved housing starts and sales this year as the economy strengthened. That optimism dimmed in the wake of a lackluster spring home-selling season and a slowing U.S. economy.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,129.98 -1.99 -0.01%
S&P 500 1,998.01 -0.97 -0.05%
NASDAQ 4,552.9680 +0.2090 0.00%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs