Back to top

Real Time Insight

Housing is finally back in the good graces of Americans. 

In a recent Gallup poll, Americans named housing as the best long-term investment for the first time in 4 years, beating out stocks, bonds, CDs/savings and gold.

But while average Americans may be bullish, the monthly housing data is telling a different story.

March's new and existing home sales were both weaker than expected.

Existing home sales for March fell 7.5% below the pace of a year ago. It was the lowest sales volume since July 2012. It was also below March sales for both 2010 and 2012.

New home sales fared even worse as they fell 14.5% to 384,000 in March from an upwardly revised February number of 449,000. Expectations had called for 455,000.

It was 13.9% below the year ago home sales of 443,000. This was the first year over year DECLINE in new home sales since 2011.

Prior to the housing bust and the Great Recession, new home sales averaged about a million a month so sales are still well below the norm.

Median New Home Price at Record High

Several of the homebuilders have reported earnings this week. Sales are starting to look wobbly in some parts of the country, especially the West.

Meritage Homes reported orders down 32% in Arizona, 25% in California and 12% in Colorado.

Yet, average selling price continues to rise and, across the industry, is at all-time highs. According to the Commerce Department, the median hit $290,000 in March, higher than that at the peak of the housing boom in March 2007 of $262,600.

The three homebuilders who have reported earnings this week also said they still had "pricing power" and reported another big year over year jump in average selling price.

Meritage Homes: Average selling price up 16% to $366,000
D.R. Horton: Average selling price up 10% to $278,900
Ryland: Average selling price up 18.1% to $327,000

The national housing market is now facing sharply higher home prices but weakening sales. Mortgage applications are at 14-year lows despite mortgage rates remaining under 5%, a historically low level.

Is the housing market throwing up a red flag?

Or is this spring slowdown just a hiccup on the continued road to recovery?

 


Read the analyst report on DHI

Read the analyst report on MTH

Read the analyst report on RYL


Zacks Investment Research

Just Released: 5 Stocks to Double

Today, you are invited to download a free Special Report from Zacks Investment Research. It reveals five moves that could gain +100% and more in the next 12 months:

One is a "boring" business delivering blistering growth. Another is a red-hot oil and gas producer set to surge on a drilling breakthrough. Still another, an online payment provider, ignited a 53% sales explosion during the past year.

Close This Panel X

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%