Housing stocks are again the downside leader today, what's up? This has been a tough week for homebuilding and building material stocks. In less than two days, some big names are down double digits.
Home builders this week:
- Standard Pacific down 23%
- Hovnanian down 16%
- Masco down 10%
- Lennar down 10%
- Ryland down 10%
On the surface, the decline may not seem logical. The housing market seems to be stabilizing, with sales improving and inventory levels declining.
The problem is that housing stocks have had huge runups since the summer rally began in July--many were up 50 percent or more.
But analysts are suspicious of that runup. This morning UBS downgraded DR Horton and Ryland on valuation, saying "Given our expectation for a more gradual recovery, we believe current valuations are well ahead of fundamentals."
Many traders also believe that there could be another downleg later this year, as the sales improvement taper off and inventories remain stubbornly high.
- The Dow 30 in Real Time
- Factories Are Recovering, But Services May Create More Jobs
- Bailed-Out Banks' Executives Set to Cash In Again
- The CNBC Stock Blog
Questions? Comments? email@example.com