With Housing Stocks Mixed, This Analyst Says A Recovery 'Is Still Barely On First Base'
Housing stocks were mixed Tuesday despite an upbeat report on new home sales and news that the slowdown in home prices nationwide is continuing.
The exchange traded fund SPDR S&P Homebuilders (ETF) (NYSEARCA:XHB) was nearly unchanged recently at $34.29.
Two of the nation's largest home builders by market capitalization were down: Lennar Corporation (NYSE: LEN) off 0.7 percent to $44.61, and PulteGroup, Inc. (NYSE: PHM) slipping 1.4 percent to $20.95.
Sales of new homes surged 11.6 percent in December from the previous month, according to the U.S. Commerce Department.
Separately, the average price of existing homes fell 0.1 percent during November compared with the previous month, according to the Standard & Poor's/Case-Shiller 20-city home price index, also released Tuesday.
'Barely On First Base'
"The housing recovery is still barely on first base," David Blitzer of S&P Dow Jones said. "Prospects for a home run in 2015 aren't good."
Auction.com LLC on Tuesday predicted that existing home sales for January will be flat compared with December's 5.04 million units. "There's nothing pointing towards a quantum leap in January home sales," Auction.com's Richard Sharga said.
Google Trends data, meanwhile, suggests "tepid" demand according to Sharga, while falling inventory could hurt sales if demand does pick up. Sharga also cited potential fallout from weaker economies in the oil producing states, particularly Texas, as a concern for the housing market in 2015.
Sales of new single-family houses in December were at a seasonally adjusted annual rate of 481,000 units, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development.
The December sales rate was 8.8 percent above a year earlier, while for all of 2014, sales of new homes rose 1.2 percent to 435,000 new units.
What Case-Shiller Said
Separately, Case-Shiller said its National Index posted a price decline of 0.1 percent for December, with Tampa leading with a 0.8 percent increase, offset by decreases of 1.1 percent in Chicago and 0.9 percent in Detroit.
The index showed prices were up 4.7 percent in November compared with a year earlier, versus 4.6 percent in October.
"The best hope for housing is the rest of the economy," Blitzer said.
Cheap gasoline is helping consumer confidence and a good number for the Gross Domestic Product is expected later this week, Blitzer said.
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