Home Builder Stocks Surge on Positive Economic Indicators

Strategic Insights -

Residential home builder stocks experienced a significant rebound in the wake of a report from the National Association of Realtors, indicating a rise in pending home sales. The Philadelphia Housing Sector Index increased by 1.63% after the report revealed that the seasonally adjusted index of sales agreements rose to 97.6 in February, exceeding economists' expectations of a decline to 90.3. This positive news, coupled with the growth in the service sector, which expanded at its fastest pace in over two years, suggests that the economic recovery is gaining momentum. As a result, home builder stocks like Brookfield Homes Corp. (BHS) saw significant gains, with BHS surging by 12.17%.

Key Takeaways:

  • The National Association of Realtors' report on pending home sales showed a seasonally adjusted index of sales agreements rose to 97.6 in February, beating economists' expectations.
  • The Philadelphia Housing Sector Index increased by 1.63% in response to the report.
  • The service sector expanded at its fastest pace in over two years, indicating a strengthening economic recovery.
  • Home builder stocks like BHS, BZH, GFA, HOV, TOL, PHM, and LEN showed significant gains, with BHS leading the pack at 12.17%.
  • Comtex SmarTrend Alert indicated an uptrend for BZH on 11-11-2009, but a downtrend for BHS on 03-22-2010.
  • The report provides a positive outlook for the housing market, driven by the rise in pending home sales and the growth in the service sector.

Statistics:

  • The seasonally adjusted index of sales agreements rose to 97.6 in February, a 7.3% increase from the previous month (National Association of Realtors).
  • The Philadelphia Housing Sector Index saw a 1.63% increase in response to the report.
  • The service sector expanded at a 1.6% annual rate in March, its fastest pace in over two years (Bureau of Labor Statistics).
  • BHS gained 12.17%, while BZH increased by 4.16% on the news (MidnightTrader).
  • The report highlights a positive trend in the housing market, with pending home sales increasing and the service sector expanding rapidly.

Sources:

  • National Association of Realtors
  • Bureau of Labor Statistics
  • MidnightTrader
  • Comtex SmarTrend Alert
  • SmarTrend is a registered trademark of Comtex News Network, Inc.