What about the slowdown after the warm weather? The NAHB Chairman Barry Rutenberg said, "Builders in many markets are reporting that buyer traffic and sales have picked back up after a pause in April."
That's good news. I am not pleased to hear that builders are also complaining about rising material costs.
What about that ocean of foreclosed properties still out there? We keep waiting for the Great Foreclosure Dump, but it's more like a rivulet than a flood. It's not that they aren't there, their just isn't wholesale dumping going on. Somebody is managing the supply fairly well.
One more point: we will get earnings from move-up builder Toll on May 23. While overall order growth from builders has been strong this spring (the eight that have already reported have seen order growth around 34 percent on average), I suspect Toll will report excellent numbers, supporting the idea that the move-up buyers are having a somewhat easier time financing their buying than first time buyers.
The biggest problem with home building stocks: most are near new highs and fully reflect a modest housing recovery this year.
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