US May housing starts rose more than expected to 1350K vs 1311K expected, a rise of 5% to 11 year highs. However building permits fell 4.6%. Housing numbers have been falling for a few months after a big jump in 2017 with the Fed raising rates.
Rising interest Rates and higher raw material costs saw leading luxury homebuilder Toll Brothers stock slump almost 10% despite reported better than expected fiscal second-quarter earnings Tuesday. Investors are uncertain about real estate in such an environment.
US February housing starts fell more than expected to 1236K vs 1290K expected, a fall of 7% vs a fall of 2.7% expected. Housing numbers have been falling for a few months after a big jump in 2017 and the Fed rising rates. Permits were also weaker.
KB Homes $KBH followed fellow homebuilder Lennar $LEN with soaring revenue in Q4 earnings from the steady U.S. housing recovery. $KBH is benefitting from favorable interest rates and increased consumer confidence.
Homebuilder Lennar revenue rose 12% in Q4 earnings from the steady housing recovery.$LEN is benefitting from favorable interest rates and increased consumer confidence. Net earnings fell with key transactions moved to the upcoming quarter after Republican Tax Reform.
Beazer Homes’ Homebuilding $BZH reported better than expected fourth-quarter fiscal 2017 earnings Wednesday. Revenue was substantially higher over last year, with sales in the East up 21% with several markets impacted by Hurricane Harvey and Irma.
Lennar and CalAtlantic merger in nearly $10B deal will create the country’s largest homebuilder, with LTM revenues topping $17B and a market cap of roughly $18B. The new company will control 240K homesites, with 1.3K active communities in 49 markets across 21 states.
Lumber futures are at 12 year highs after Hurricane Harvey and Irma. Prices have been rallying since the housing crash of 2008 and earlier this year the U.S. administration imposed tariffs on plywood coming from China and lumber coming from Canada. Wildfires across Canada and the western U.S. also pushed prices higher pre hurricanes.
Hardware and home improvement retailer Lowe’s $LOW reported worse than expected second-quarter earnings and warned for the full-year with operating margins pressure. Home Depot $HD shares sold off last week on growth concerns.
Homebuilder Toll Brothers $TOL reported better than expected fiscal third-quarter earnings before the market opened Tuesday. However $TOL fell 3% after thee average price of homes fell over the year.