Housing Stocks Rise Despite Falling Sales

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Despite news that pending home sales were expected to tumble to their lowest levels in at least six years, L.A.-area lenders and homebuilders were buoyed for a second-straight day after an analyst called some stocks bargains.


The National Association of Realtors reported Tuesday morning that the index for pending sales of previously owned homes decreased at a seasonally adjusted annual rate of 6.5 percent for August reaching its lowest point since tracking began in January 2001.


But despite the seemingly bad news, shares in local companies gained for a second-straight day, spurred by a Monday report from Citigroup analyst Stephen Kim that the industry’s decline has made some homebuilder stocks attractive.


Shares in Los Angeles-based homebuilder KB Home, which have gained 16 percent since Sept. 27, were up 4.2 percent Tuesday. Calabasas-based homebuilder Ryland Corp. also gained 5.8 percent Tuesday and have now added as much as 21 percent since Sept. 27. Shares in both companies are still down around 50 percent for the year, however.


Also up were shares in Pasadena-based lender IndyMac Bancorp, rising 3.1 percent to $24.81. Shares in Santa Monica-based mortgage investment firm Anworth Mortgage Asset Co. surged 5.1 percent to $5.77.


According to regional breakouts in the National Association of Realtors report, home sales in the West declined 2.7 percent in August compared to July and 27 percent when compared to the same month a year ago. All other regions of the country also saw declines, with the South experiencing a 9.5-percent fall since July and 21 percent fall since a year ago.

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