5 Residential Homebuilder Stocks Gaining on Stronger Housing Market

Michael Teague  |

The U.S. Census bureau and the Department of Housing and Urban development released a joint report Tuesday morning vindicating some of the recent talk about a recovery in the housing market. With purchases of new homes in the U.S. having increased 15.6 percent between December 2012 and January 2013, new home sales were at their highest since July 2008, and 29 percent higher than they were at the same time last year.

Home prices were up 6.8 percent for their largest increase since mid-2006. Douglas Yearley, CEO of luxury homes builder Toll Brothers (TOL), nearly effusive in an interview on CNBC, saying that the housing recovery “feels like it’s the real deal this time.”

His company and several of its peers in residential construction saw substantial increases in share price after the release of Tuesday’s news:

KB Home (KBH) – Headquartered in Los Angeles, CA, the company specializes in high-end custom-built homes. They are a relatively small-cap company at $1.4 billion, and Tuesday’s housing news sent their share prices up over 7 percent to close at $18.36.

Pulte Group Inc. (PHM) – With a focus on building energy efficient homes, Pulte’s market cap is $7.3 billion. They saw their share prices increase over 5.7 percent to close at $19.05.

Toll Brothers Inc. (TOL) – The Pennsylvania-based luxury track home builder has presence in 19 states. With a market cap of $5.8 billion, the company’s share price gained over 3.25 percent to close at $34.17.

DR Horton Inc. (DHI) – The largest residential home builder in the United States, the Dallas, Texas company has a market cap of $7.15 billion.  The company’s shares gained 4 percent, currently trading at a price of $22.25.

Lennar Corp. (LEN) – The Miami, Florida, based company specializes in “affordable, move-up, and retirement homes”.  With a market cap of $7.3 billion, their shares gained just under 3.7 percent to close at $38.01.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
KBH KB Home 22.82 0.15 0.66 1,301,509 Trade
SCI Service Corporation International 45.97 0.61 1.34 1,047,294 Trade
TOL Toll Brothers Inc. 36.85 0.14 0.38 1,404,384 Trade
DHI D.R. Horton Inc. 39.97 0.17 0.43 7,585,356 Trade
LEN Lennar Corporation Class A 48.90 0.66 1.37 3,598,135 Trade
PHM PulteGroup Inc. 27.12 0.21 0.78 3,420,137 Trade

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