GO
Loading...

Enter multiple symbols separated by commas

Housing Stocks Get Hammered

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.

_____________________________

_____________________________

Questions? Comments? tradertalk@cnbc.com


  • Bob Pisani

    A CNBC reporter since 1990, Bob Pisani covers Wall Street from the floor of the New York Stock Exchange.

Wall Street

  • Robert Shiller

    Nobel Prize-winning economist Robert Shiller says that his key valuation indicator is flashing warning signs.

  • Lael Brainard

    The Fed is in the early stages of an analysis on changes in bond market liquidity, amid signs that liquidity may be less resilient than in past.

  • Bill Gross

    Janus Capital acquired a majority interest in Kapstream Capital and said Kapstream's Palghat will support Bill Gross as co-portfolio manager of the Janus Global Unconstrained Bond strategy.