Tuesday, October 17, 2006

Homebuilder Recovery signalling upcoming strength

Is the Gloom Lifting for Homebuilders?

Some good news on the housing front. Could all this jibberish about housing bubble be over done? The stock market could be signalling a spring fling in the housing market.........

Investors drove up shares of the major U.S. homebuilders Oct. 10 after JP Morgan upgraded DR Horton (DHI), Toll Brothers (TOL), and Standard Pacific (SPF), citing stabilized inventories, while the Dallas Fed president suggested fears of a housing correction were overblown.
"While pricing, orders, and starts may still show negative trends in the near-term, we believe inventories the leading driver of the market's pullback, in our view, as well as our prior cautious stance have begun to stabilize, and in turn should drive a market recovery," the bank said Oct. 10 in a research report.

And the Fed thinks so too..........

On the same day, in a question-and-answer session after a speech in London, Dallas Federal Reserve president Richard Fisher downplayed risks of a housing market correction, which he said was one of the "most over-anticipated in history."

Source: Business WeekPublication date: October 11, 2006

1 comment:

N_FO said...

So nice to hear something positive for a change... and it is coming from the FED.

Thanks Dr.