U.S. Housing Prices Fall 15.3% in April

It's the largest drop since the S&P/Case-Shiller Home Price Index's inception eight years ago.
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U.S. housing prices showed a 15.3% year-over-year decline in April, according to a closely watched U.S. housing data set released Tuesday.

The S&P/Case-Shiller Home Price Index, which tracks 20 major cities across the U.S., said the drop was the largest since the index's inception in 2000.

Falling housing prices remain an issue for homebuilders, who will have a hard time turning profits until prices stabilize.

Nonetheless, Credit Suisse initiated coverage of the homebuilders Tuesday with an overweight rating.

The bank's analyst, Daniel Oppenheim, has outperform ratings on

Centex

(CTX)

,

DR Horton

(DHI) - Get Report

,

KB Home

(KBH) - Get Report

,

Pulte Homes

(PHM) - Get Report

,

Ryland

(RYL)

and

Toll Brothers

(TOL) - Get Report

; neutral ratings on

Lennar

(LEN) - Get Report

,

MDC Holdings

(MDC) - Get Report

and

NVR

(NVR) - Get Report

; and underperform ratings on

Hovnanian Enterprises

(HOV) - Get Report

and

Meritage Homes

(MTH) - Get Report

.

Oppenheim, who formerly covered the homebuilder stocks at Bank of America, said tough conditions will continue for the homebuilding industry, "but an inflection point in housing is likely in spring 2009 as inventory levels will likely start to decline."

Risks for the sector remain rising mortgage rates and homebuilders being unable to reduce their selling costs to manageable levels, he said.