GO
Loading...

Enter multiple symbols separated by commas

Housing Stocks Hit New Highs—Too Much Optimism?

Home Construction
stangls
Home Construction

Home building: An awful lot of optimism built into the spring home buying season!

This morning, the NAHB Housing Market Index, a sentiment indicator of builders, climbed to a four-year high.

Also today, Owens Corning , a force in the building materials industry (roofing, fiberglass, etc.) put up a disappointing report, with similar optimistic language: “Looking forward to 2012, we anticipate improved housing starts in the U.S. and modest growth in the global economy.”

Yesterday, building materials giant Masco, strong in plumbing, paint, and cabinets, disappointed, but added they were heading into 2012 with “cautious optimism.”

Bottom line: There’s an awful lot of optimism that housing is going to turn around. The iShares Home Construction Index is up 50 percent since October. Builders like Ryland, Lennar, and PulteGroup are at new highs. Not a lot of room for error!

Symbol
Price
 
Change
%Change
LEN
---
MAS
---
OC
---
RYL
---

Respected housing analyst John Burns is forecasting 20 percent growth in sales in 2012. Most of the builders have that growth in the backlog already, Burns notes, so something bad will have to happen to stop it.

_____________________________
Bookmark CNBC Data Pages:

_____________________________

Want updates whenever a Trader Talk blog is filed? Follow me on Twitter: twitter.com/BobPisani.

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.