This Day On The Street
Continue to site right-arrow
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
TheStreet Open House

Disappointing New-Homes Sales Report Dents Homebuilders' Stocks

NEW YORK ( TheStreet) -- The foundations for the 11 homebuilders in the PHLX Housing Sector Index were shaken on Thursday on a report that sales of new single-family homes during June missed estimates.

Also on Thursday, earnings from homebuilders D.R. Horton (DHI) and PulteGroup (PHM) missed analysts' estimates. Since my post on June 18 covering the 19 stocks in the housing sector index, shares of D.R. Horton are down 6.6%, followed by Lennar (LEN), which is down 4.9%, and Toll Brothers (TOL), which is down 4.6%.

Bigger losses in the index come from Radian Group (RDN) and Owens Corning (OC), which are both down 14% since June 17. Radian provides private mortgage insurance and Owens provides insulation, roofing and siding.

Starbucks Store Makeovers Are Boosting Profit Margins

Cramer: Every Which Way But Short

Amazon Earnings: What Wall Street Is Saying

Let's take a look at three important housing data releases.

On July 16, the National Association of Home Builder Housing Market Index rose four points, moving above the neutral 50 to 53. The graph above shows this rise, but does not show the weaker-than-expected reading for single-family housing starts for June that were reported on July 17.

Single-family starts plunged 9% to a seasonally adjusted annual rate of just 575,000 units in June, back below the 600,000 threshold I have been tracking. Single-family starts continue to track below the normal 1 million to 1.2 million annual rate of production.

On Thursday, U.S. Census Bureau reported that new-home sales plunged 8.1% in June to a seasonally adjusted annual rate of just 406,000 units when analysts were expecting 510,000. The inventory of new homes is at a 5.8 month supply at 197,000 units in June.

1 of 5

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 16,805.41 +127.51 0.76%
S&P 500 1,964.58 +13.76 0.71%
NASDAQ 4,483.7150 +30.9230 0.69%

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