U.S. homebuilder shares eased on Thursday after the government reported that housing starts, building permits and housing completions fell in August from July.
Among prominent homebuilders, D.R. Horton (DHI) - Get Report shares traded at $73.34, down 1.4%; and NVR (NVR) - Get Report traded at $4,159, down 1.4%; and Toll Brothers (TOL) - Get Report slipped 0.9% to $44.59.
Privately owned housing starts registered a seasonally adjusted annual rate of 1,416,000 in August, down 5.1% from the revised July estimate of 1,492,000.
At the same time, the August number is 2.8% above the August 2019 rate of 1,377,000.
Meanwhile, privately owned housing units authorized by building permits posted a seasonally adjusted annual rate of 1,470,000 in August, down 0.9% from the revised July rate of 1,483,000.
The August figure edged down 0.1% from the August 2019 rate of 1,471,000.
In addition, privately owned housing completions recorded a seasonally adjusted annual rate of 1,233,000 in August, down 7.5% from the revised July estimate of 1,333,000.
The August figure is 2.4% below the August 2019 rate of 1,263,000.
Morningstar analyst Brian Bernard offered praise for D.R. Horton after its July earnings report.
“D.R. Horton delivered an excellent fiscal-third-quarter performance, which we view as more proof that housing market fundamentals in the U.S. have remained strong despite the coronavirus pandemic,” he wrote in a commentary.
“[The] combination of D.R. Horton's scale and its position in the entry-level market will allow the firm to continue to gain market share.”
Still, Bernard thinks the stock is overvalued, putting fair value at $59.