Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Housing Reaches Major Milestone in June

The U.S. housing market hit a critical milestone today for the first time in more than seven years. According to a monthly survey conducted by the National Association of Home Builders, a majority of builders now view conditions in the market as "good," rather than "poor."

As you can see in this chart, the June reading of 52 was the first time the association's Housing Market Index came in above 50 since April of 2006 -- a reading of more than 50 indicates that more builders view sales conditions as good than do poor.

"Surpassing this important benchmark reflects the fact that builders are seeing better market conditions as demand for new homes increases," said NAHB chairman Rick Judson. "With the low inventory of existing homes, an increasing number of buyers are gravitating toward new homes."

The news adds substance to positive pronouncements from some of the nation's biggest homebuilders over the last few months. Robert Toll, executive chairman of Toll Brothers (NYSE: TOL  ) , the nation's largest luxury homebuilder, noted in May:

We believe the industry is still in the early stages of a recovery. ... As home prices continue to increase, homeowners' balance sheets should continue to improve as should bank balance sheets. People will feel wealthier, banks will lend more and the economy should continue to improve: We believe this should drive demand and, therefore, home prices are likely to continue to rise.

A month earlier, Richard Douglass, the president and CEO of PulteGroup (NYSE: PHM  ) , observed:

The stronger demand which the housing industry saw throughout 2012 has carried into the spring selling season of 2013. We experienced higher traffic in our communities with buyers feeling a greater sense of urgency given the combination of limited product inventory and rising prices found in many markets throughout the country.

And in March, Lennar's (NYSE: LEN  ) CEO said:

Our first quarter results clearly reflect continued improvement in the marketplace. Current market conditions are driven by strong demand resulting from low interest rates and attractive home prices, which have led to very affordable monthly payments, compared to increasing rental rates. Supply continues to be limited by low home inventories and fewer competing homebuilders. Accordingly, pricing trends have been positive, as shown by a 13% increase in the average sales price of homes in our backlog at quarter-end, compared to last year.

Given the importance of housing to the economic recovery, it should be no surprise that stocks are rallying on the heels of this news. Both the Dow Jones Industrial Average (DJINDICES: ^DJI  ) and the S&P 500 (SNPINDEX: ^GSPC  ) were up big today.

Discover the Motley Fool's top stock for 2013
The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report "The Motley Fool's Top Stock for 2013." Just click here to access the report and find out the name of this under-the-radar company.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2493666, ~/Articles/ArticleHandler.aspx, 9/29/2016 1:17:30 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,156.02 -183.22 -1.00%
S&P 500 2,151.45 -19.92 -0.92%
NASD 5,259.66 -58.89 -1.11%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 1:02 PM
^DJI $18154.00 Down -185.24 -1.01%
LEN $42.21 Down -0.99 -2.29%
Lennar CAPS Rating: **
PHM $19.86 Down -0.28 -1.39%
PulteGroup CAPS Rating: ***
TOL $29.55 Up +0.14 +0.48%
Toll Brothers CAPS Rating: ***