Pulte Group (PHM) stock was gaining at midday, after it reported weaker-than-expected earnings before the opening bell Tuesday morning and slipped by about 2% premarket, but opened pretty much unchanged. The homebuilder continues to believe that the housing market will benefit from an improving economy and job creation.
D.R. Horton (DHI) reports earnings before the opening bell Wednesday and analysts expect this homebuilder to earn 75 cents a share. These earnings reports are key measures for the health of the housing market, given weakening homebuilder sentiment and single-family starts well below potential.
D.R. Horton and Pulte ended Monday with year-to-date gains of 33.8% and 33.4%, respectively, and both are in bull market territory up 37% and 38%, respectively, vs. their Nov. 9 post-election lows. These are impressive short-term performance numbers but keep in mind that D.R. Horton is 16.6% below its July 2005 high of $42.82 and Pulte is 49.4% below its July 2005 high of $48.22.
On July 18, the National Association of Home Builders reported that their Housing Market Index slipped two points in July to 64. This measure of housing sentiment peaked at 71 in March vs. its all-time high of 72, set in June 2005.
On July 19, the Census Bureau reported that single-family housing starts, the NAHB benchmark, rose by 6.3% in June to a seasonally adjusted annual pace of 849,000 units.
Monthly Graph of the NAHB HMI vs. Single-Family Housing Starts