The housing-related stocks surged on Thursday, after these stocks have sold off significantly from their highs seen in early 2013. Some of these stocks even hit highs not seen in two to three weeks. These gains stand out handily because the home builders had been largely ignoring some of the post-June rally as investors continue to worry about interest rate sensitivity.
As you will see, these stocks surged on Thursday and investors now may be wondering if they need to jump on board. After gains of 7% to 9%, we wanted to see how these have traded in recent weeks and what the 52-week range is, and we even compared each of these to the consensus analyst price target from Thomson Reuters.
Beazer Homes USA Inc. (NYSE: BZH) rose by 9.3% to $18.97, against a 52-week range of $10.90 to $23.29. This was the highest close since June 19. Beazer’s consensus price target is $20.09.
D.R. Horton Inc. (NYSE: DHI) rose by 9.1% to $22.98 on Thursday. Its 52-week range is $16.93 to $27.75, and that was the highest closing price since June 19. Its consensus price target is $26.89, according to analysts.
KB Home (NYSE: KBH) rose 7% to $19.62, against a 52-week range of $9.04 to $25.14. That is the highest close since June 28. KB’s consensus analyst price target is $20.68.
Lennar Corp. (NYSE: LEN) rose by 8.3% to $37.44, against a 52-week range of $28.51 to $44.40. This was the highest closing price since June 19, and the consensus analyst price target is $42.55.
PulteGroup Inc. (NYSE: PHM) was up 7.2% on Thursday with a close of $20.39. Pulte’s 52-week range is $9.96 to $24.47, and that was the highest close since June 19. The consensus price target is $23.03.
Toll Brothers Inc. (NYSE: TOL) closed up 6.6% at $34.66 on Thursday, and the 52-week trading range is $28.36 to $39.25. This was the highest price going back to May 28. Analysts have a consensus price target of $39.05 for Toll Bros.
We recently provided insight, along with a dollars and cents analysis, of what exactly rising mortgage rates really cost borrowers as interest rates rise.
Apparently the recent comments from Fed Chairman Ben Bernanke calling for no likely interest rate hikes before 2015 are helping. The markets are also becoming more comfortable with the so-called tapering efforts of the Federal Reserve when it comes to Treasury and residential mortgage-backed securities buying as well.
The excitement was not as strong in the housing fix-up stocks like Home Depot Inc. (NYSE: HD) with a gain of 0.6% to $79.86. It is still within about 2% of a 52-week high. Lowe’s Companies Inc. (NYSE: LOW) closed down two cents at $43.37, and it is also about 2% from its 52-week high as well. Then there was the iShares Dow Jones US Home Construction (NYSEMKT: ITB) exchange traded fund, and it closed up 5.4% at $23.61, with a 52-week range of $15.80 to $26.21.
The long and short of the matter is that housing stocks are back on fire. One caveat: mortgage rates have chased up the rise in Treasury yields. With the 10-year Treasury and 30-year Treasury having risen about 100 basis points in just over 60 days, the mortgage qualifications and housing affordability could start to act as a drag against the housing recovery. That being said, it sure seems obvious that the enthusiasm for housing remains in place.
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