Homebuilding Insiders Still Not Buying

Fear and loathing continues to grip everything homebuilding related, and insider sentiment continues to fall in the monthly National Association of Home Builders poll:

An index that tracks developers’ expectations of future home sales fell this month to a new record low, suggesting price cuts haven’t yet injected a spark into the slumping market.

The National Association of Home Builders said Tuesday its housing market index, which tracks builders’ perceptions of conditions and expectations for home sales over the next six months, fell two points to 18 in October, the lowest level since the index began in Jan. 1985. It was the eighth straight monthly decline.

We threw in the towel on the builders when it seemed that Washington could not put any sort of plan together. Not that we thought it would underpin the market, but a sharp rally in the stocks could have led to big gains if they would have merely traded back to book value. Bill Gross has proposed a RTC like bailout, but that does not appear to be in the works.

The news beat rolls on, however. The CEO of Caterpillar (CAT-NYSE) called it the worst housing market since World War 2, and in August the median price of a home dropped the most since 1937.

Ara Hovnanian was back on CNBC today, but had little to say except that the sale prices witnessed in the “Deal of the Century” would not be permanent. Ara is no doubt a decent fellow, but we are watching he does, not what he says.

And we will sit on the sidelines until we see him or other homebuilding executives making open market purchases of their stock. In the interim your time might be better spent looking stocks and sectors outside of this beaten down group.

Homebuilder Outlook Falls to Record Low
AP
-----------------------------------------------------------------------------------------------------------------------
The content contained represent the opinions of 1440 Wall Street. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author. No Position HOV

Comments:

<< Back to main