Homebuilder Tax Credit Fails to Lift Sector

Despite an extension of the homebuilder tax credit being signed into law today by President Obama, shares of homebuilders remain modest.
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WASHINGTON (

TheStreet

) -- Shares of homebuilders are lackluster Friday morning, despite congress finally approving the extension of the homebuyers tax credit.

Even more significantly, the tax credit is also being offered to existing home owners. The bill, which is expected to be signed by President Barack Obama today, extends the $8,000 tax credit for first-time homebuyers to April 30 and will also allow people who have lived in a home for at least five years to receive $6,500 if they purchase a new home.

Regardless, shares of homebuilders are only up modestly.

KB Home

(KBH) - Get Report

is flat,

Lennar

(LEN) - Get Report

is growing 3.6% to $14,

MDC

(MDC) - Get Report

is rising 1.1% $32.88,

D.R. Horton

(DHI) - Get Report

is advancing 0.3% to $11.87,

Toll Brothers

(TOL) - Get Report

is up 0.2% to $18.02 and

Pulte Homes

(PHM) - Get Report

is growing 0.2% to $9.68.

Investors clearly remain skeptical that the tax credit will do much for a sustained recovery in the housing sector.

"In our opinion, extending the credit to existing homeowners would not likely reduce the huge supply of housing inventory," CreditSights said in a note.

-- Reported by Jeanine Poggi in New York

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