Tuesday, September 22, 2009

New Construction Homes Back in Good Graces With Investors

The number of new houses under construction rose in August by 1.4 percent.  But that's nothing compared to the rise in stocks of companies that build houses.  The stock price of the six largest builders have risen by an average of 68 percent so far this year.

Their stock prices were irresistlbly cheap as housing starts plunged 74 percent from their 2006 peak and inventories of unsold houses swelled. Look at prices now!

Recent prices of home builder's stock:

Company                             Stock Price         Year-to-Date Gain

Hovnanian Enterprises (HOV)   $4.65              +170%

Lennar (LEN)                           $16.60             +91%

D.R. Horton (DHI)                    $13.19             +87%

KB Home (KBH)                       $19.69             +45%

Pulte Homes (PHM)                  $12.73             +16%

Toll Brothers (TOL)                   $21.53              + .5%

Source: Standard & Poor's