Featured Content

An Important Message from Michael Lombardi:

An Important Message from Michael Lombardi:

I've identified six time-proven indicators that now all point to a stock market crash in 2015. You can see my latest video, Six Time-Proven Indicators Now All Pointing to a 2015 Stock Market Crash, which spells out why we're headed for a crash and what you can do to protect yourself and even profit from it, when you click here now.

Housing Stocks: Are They Hot Again?

By

Housing StocksThe housing market is well on its way to recovery. Following several years of dismal sales, high foreclosures, short sales, and declining home prices, there’s strong optimism now.

Remember when your home was your castle? We are near that stage again, as we are seeing that the housing market has some bite to it.

The current situation has vastly improved to the point where housing stocks are hot.

Triggering the buying was a combination of historically low interest rates on mortgages, lower home prices, and renewal in the jobs market. (Read “Jobs Coming Back, but Not from Overseas.”) And, as more people work, I expect the housing market will continue to strengthen, as shown by the strong housing starts and building permits trend. In December, there were an impressive annualized 954,000 starts, which was above the Briefing.com estimate of 880,000 and November’s 851,000.

Also lending support to the housing market recovery was a strong building permits reading of 903,000 in December, beating both the Briefing.com estimate of 880,000 and the 900,000 in September. The strong reading indicates that builders are expecting a good flow of buying in the housing market, and this could only bode well for homebuilder stocks.

Existing home sales came in at a seasonally adjusted annualized rate of 4.9 million, up 12.8% year-over-year, according to the National Association of Realtors. The median for home prices came in at $180,000 in December, up 11.5% year-over-year.

The S&P/Case-Shiller U.S. Home Price Index, comprising the 20 largest U.S. metropolitan cites, increased a better-than-expected 4.3% in October, representing the ninth straight up month. When prices rise, I expect more spending by homeowners, due to the increase in wealth.

The improvement in the housing market is also showing up in the results of the homebuilder stocks.

The technical analysis chart of the S&P Homebuilders Select Industry Index (NYSEArca/XHB) shows the upward trend from the October 2011 bottom to the current high. The upward break near the $27.00 level was bullish, following its breakout from some topping action.

XHB SPDR S&P Homebuilders stock market chart

Chart courtesy of www.StockCharts.com

The NAHB Housing Market Index reported a strong reading of 47 in December, in line with the Briefing.com estimate and November’s reading. What is interesting is that the reading is approaching the 50 level, which hasn’t been reached since April 2006, over six years ago.

I expect the housing market to continue to improve, especially if the jobs market and economy improve.

At this juncture, if you hold some of the hot homebuilder stocks, I would be taking some money off of the table after the run-up in the housing market stocks.

Premium Content

Secret "New Swiss Bank Account" Safest Way to 44% Returns

Secret

It's the safest—but, until now, completely ignored—place for your money. Because these elite "bank accounts" pay guaranteed 5% cash payments per annum on top of returns on capital exceeding 44%... Learn all about them here.

About the Author, Browse George Leong's Articles

George Leong is a senior editor at Lombardi Financial. He has been involved in analyzing the stock markets for two decades, employing both fundamental and technical analysis. His overall market timing and trading knowledge are extensive in the areas of small-cap research and option trading. George is the editor of several of Lombardi Financial’s popular financial newsletters, including Red-Hot Small-Caps, Lombardi’s Special Situations, Judgment Day Profit Letter, Pennies to Millions, and 100% Letter. He is also the editor-in-chief of a... Read Full Bio »

Exclusive profit Confidential Presentation

Stocks that Double in Two Days No Matter What the Market Is Doing?

Stocks that Double in Two Days No Matter What the Market Is Doing?

We picked SafePay Solutions stock and it jumped 142% in two days. We then picked China 3C Group stock and it went up 103% in two days. To learn more about our stocks that double in two days, see them here now.

×