Contracts to buy U.S. previously owned homes increased for a third straight month in February. On Wednesday, the National Association of Realtors said its Pending Home Sales Index, which measures signed contracts, rose 0.8% last month to the highest level since August. Economists polled by Reuters had forecast contracts, which become sales after a month or two, would fall 2.3%.
Back on February 16, I gave you a list of 12 stocks I’d sell into the rally after the February 1 meeting of the Federal Reserve. (Here’s the link https://jubakam.com/wednesdays-rally…re-the-12-stocks/). Yesterday in the first step of my Special Report: 5 Steps for the Next 5 Months” I promised another set of sell recommendations before Friday’s jobs report for February, the March 14 CPI inflation report, and the March 22 meeting of the Fed’s interest rate setting group, the Open Market Committee. Here’s that list of another 12 stocks to sell.
In the four weeks through February 26, the median price for a typical home was $350,246, down 0.6% from the same period a year earlier, according to Redfin. That’s the first year-over-year drop since 2012.
The U.S. supply of new homes relative to sales in June was the highest since the middle of the last crash in 2010. In early July, buyer traffic to homebuilder websites and sales offices had plunged to the lowest level for the month since 2012, according to a survey of builder sentiment from the National Association of Home Builders. Here’s the problem: a pandemic housing boom led builders to start construction because the market had too little inventory. In June, 824,000 single-family homes were under construction in the United States, more than at any time since October 2006, according to an NAHB analysis. Now those home builders are having trouble selling those homes
Lennar (LEN) has started trimming prices and offering buyer incentives to bolster sales. The bad news here is that a slowing housing market is an early indicator of rising odds of a recession. The good news is that this is supposed to be what happens–the housing sector slows–when the Federal Reserve raises interest rates to fight inflation.
In my daily trawling through the market I come upon lots of tidbits of knowledge that I think are important to investors but that don’t justify a full post. I’ve decided to start compiling these notes here each day in a kind of running mini blog that I’m calling Notes You Need. A typical items resembles this from today: “4:20 p.m.: The U.S. Dollar Index gave up a morning gain to fall back to 90.32 before rallying again to close at 90.736, up 0.34 on the day. Some analysts think that the 90 level on the index might give support to the U.S. currency against other major currencies. Others think the dollar is on the verge of falling to a new thee-year low that could open the way to further declines.”
DR Horton led home building stocks higher, rising 5.43% as of 1 p.m. New York time, after showing a 31% jump in net income in earnings reported this morning before the market opened. The company also guided Wall Street to expect a strong selling season this spring.
Huge surge in new housing starts in September, according to data released this morning by the Census Bureau. Starts jumped to an annualized rate of 872,000 in September from a 758,000 annualized rate in August. The consensus forecast among economists surveyed by Briefing.com was that starts would rise only modestly to a 768,000 annualized rate.
