Well we got the 1st of 4 housing numbers this morning and this one shows that the home builders are NOT feeling too good about the immediate future.
The reading of the National Association of Home Builders (NAHB) show a reading of 46 versus a forecast of 47. This reading is a measurement of current condition, conditions in 6 months and potential buyer traffic.
It is my thought that the Fed will watch the housing numbers closely and weigh some of their future action based the readings.
We have building permits and housing starts tomorrow and then existing home sales on Wednesday–no doubt the Fed wants to see these numbers weakening.
All the news and spreadsheets can be found here.
Solid writer on SA who has written several articles (first one appeared in February 2022) on the housing mania. Much of what he has predicted has come true so far.
https://seekingalpha.com/article/4540690-housing-market-looks-set-to-implode
Lennar reports after the bell on Wednesday and I remember some homebuilder stock prices going from triple digit prices to single digit ones.
There is a ton of new construction all coming on the market at once in my area, and this pattern is being seen elsewhere, and there is no way the household formation or migration patterns will be able to soak it all up.
Sooner or later, a homebuilder is going to come in with some absolutely disastrous financials and the whole sector will tank.
I also noted the story out of KeyBanc where their analyst Kenneth Zener upgraded 7 home builders, some to Sector Weight others to Overweight. Which brings to mind the relationship between the Sell side and the Buy side analysts. Gee…you don’t suppose KeyBanc has been caught with too much home building stocks on their books, do you? The cynic in me wonders.
Artemisa–I had noticed that call. Guess they are trying to call a top in interest rates and their call has boosted the common shares a bunch today. Like you I am a cynic, but I don’t do common stocks anymore so certainly no dog in that fight.
Artemisa, 24+ years of managing institutional money on Wall Street has definitely taught me to NEVER trust an analyst from a major brokerage firm. The vast majority have horrible track records and will upgrade or down-grade and misrepresent their numbers to skew their performance history. Many of these “altruistic” analysts will change their ratings based on their firms underwriting paying clients favorable and denigrate non-clients of their firms. There should definitely be a central area of certified statistical records for each of these geniuses so we can each make up our own minds of their validity and effectiveness.
Beware of analysts bearing gifts, I am Azure
Azureblue–congrats–people like your comment.