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Housing Stocks Soar After Permits Data

David Becker
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Home builders were on the move on Tuesday moving higher for most of the trading session on the heels of news about building permits and home prices. Sales number has been tepid, and the overall housing space has seen mixed economic results in November, as the sector has recently lagged the broader indices.

Multi-family building permits, which are the most volatile of the permits categories, jumped 17% in October. Most of the permits came from the South and West. But permits for single-family homes rose only 1%. Housing starts were delayed due to the government shutdown and will be reported on December 18, 2013 according to the Commerce Department.

Earlier in the week, the National Association of Realtors reported that Pending-home sales fell for a fifth straight month in October. Pending sales reflect contracts that have been signed, and are usually revised prior to spilling over into existing and new home sales.

The most interesting release on the sector was related to housing prices. The Case-Shiller 20-city home price index edged up 1% in September from August, above the prior month’s gain and better than estimates. The annual increase accelerated to 13.3% from 12.8%.

The Spider S&P Home Builder ETF climbed to resistance levels seen near the highs in September. Support on the ETF is seen near the 50-day moving average at 30.60. Momentum is strong with the MACD (moving average convergence divergence) index printing in positive territory with an upward sloping trajectory. The relative strength index (RSI) which is an oscillator that measures overbought and oversold levels, is printing near 66, which is on the upper end of the neutral range.

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