The numbers are looking good for January: both US home construction and industrial production rose.

Here are the stats:

• The Commerce Department reported that housing starts climbed 2.8% to a seasonally adjusted 591,000 annual rate.
• Housing starts and apartment construction were both up in January.
• Apartment construction rose 9.2% to 107,000

Continue reading Housing Starts and Industrial Production Up In January

Housing Starts and Industrial Production Up In January originally appeared on BloggingStocks on Wed, 17 Feb 2010 16:30:00 EST. Please see our terms for use of feeds.

Continue reading Housing Starts Drop 4% During December

Housing Starts Drop 4% During December originally appeared on BloggingStocks on Wed, 20 Jan 2010 10:00:00 EST. Please see our terms for use of feeds.

After hitting a one-year high of $70.57 in August, the stock hit a one-year low of $26.38 in November. This morning, FNM opened at $28.53. So far today the stock has hit a low of $28.05 and a high of $28.99. As of 11:00, FNM is trading at $28.80, down $0.18 (-0.6%). The chart for FNM looks bullish but deteriorating, while S&P gives the stock a neutral 3 STARS (out of 5) hold rating.

For a bearish hedged play on this stock, I would consider a June bear-call credit spread above the $45 range. A bear-call credit spread is an options position that combines the purchase and sale of call options to hedge risk in case the stock doesn't do what you think but still leverage nice returns. For this particular trade, we will make a 4.2% return in four months as long as FNM is below $45 at June expiration. Fannie Mae would have to rise by more than 57% before we would start to lose money.

Continue reading Fannie Mae (FNM) lower as mortgage applications decline

Fannie Mae (FNM) lower as mortgage applications decline originally appeared on BloggingStocks on Wed, 20 Feb 2008 12:52:00 EST. Please see our terms for use of feeds.

Condo starts helped to increase the annual rate for housing starts by 3% to 1.229. They were expected to fall to 1.17 from the 1.191 million in September, so that's good news. While single family home starts did drop to an 884,000 annual rate, which is the lowest rate in 16 years, multifamily home starts rose to a 345,000 annual rate. Don't get too excited though. Multifamily homes declined 36% in September, so this 44% increase is primarily because of delays in starts from September that spilled over into October.

Richard Moody, Chief Economist for Mission Residential, prefers to look at the six month moving average to see what's really happening in housing because that tends to smooth out the ups and downs of the market. The six-month moving average for single family homes is down to its lowest point since October 1992. He added, "This is not, however, the bottom, or even close to it - total housing permits fell by 4.6%, while single family permits dropped by 6.1%. This brings the moving average for single family permits to its lowest level since August 1995.

Continue reading Condo starts improve housing outlook, but don't get excited

Condo starts improve housing outlook, but don't get excited originally appeared on BloggingStocks on Tue, 20 Nov 2007 11:45:00 EST. Please see our terms for use of feeds.

Consumer confidence at a two-year low originally appeared on BloggingStocks on Fri, 09 Nov 2007 11:11:00 EST. Please see our terms for use of feeds.

Things keep getting worse and builders get more and more cautious. In fact, according to the Commerce Department's most recent survey, housing starts dropped 10% to an annual pace of 1.19 million in September from a 1.33 million rate in August. That's worse than economists expected. Briefing.com's survey showed economists estimated a more modest fall to 1.29 million.

We haven't seen a housing market this weak since 1993 and the future doesn't look any better. Housing permits were down 7% to an annual rate of 1.23 million in September from 1.32 in August. That's the lowest level for permits in 12 years.

This news follows the report that the Mortgage Bankers Association will release today at its annual convention indicating falling mortgage originations and a builder's confidence survey that was released Tuesday indicating that builder's confidence is at record low levels. The nation's builders are hit hard. The most recent to report was the nation's largest, D. R. Horton (NYSE: DHI), whose orders dropped by 39%. Last week, Moody's downgraded Lennar (NYSE: LEN), Centex (NYSE: CTX) and Pulte (NYSE: PHM) homes to junk bond status.

Housing starts fall to lowest level in 14 years originally appeared on BloggingStocks on Wed, 17 Oct 2007 09:49:00 EST. Please see our terms for use of feeds.

Toll Brothers Inc. (NYSE: TOL) may be worth considering for the truly adventurous and patient investor.

The luxury home builder today posted better-than-expected second quarter results. Granted, expectations were lower than a limbo poll because the Horsham, Pa.-based company already said it wasn't going to be able to hit earlier profit forecast.

Net income fell 79 percent to $36.7 million, or 22 cents per share from $174.9 million, or $1.06 per share, a year earlier. Revenue fell 19 percent to $1.17 billion The profit beat analysts' expectations of 14 cents a share, according to Reuters.

There were a few bright spots.

Toll's cancellation rate fell to 19 percent, down from 30 percent in the first fiscal quarter and 37 percent a year earlier. The backlog, though high, was $4.15 billion at the end of the quarter, down from $6.07 billion a year earlier.

This doesn't mean that the housing markes has turned. What it may indicate, though, is that slowly but surely things eventually will get better. The company. which says the overall market remains "soft," already is seeing some signs of improvement in markets such as New York City, the Philadelphia suburbs, Raleigh. Austin and Silicon Valley in California.

Shares of Toll are down about 8 percent this year. They trade at a forward price-to-earnings multiple of 18. Four analysts rate the company either a buy or a strong buy compared with 9 who consider it a hold. The average price target is $30.50. slightly higher than where it trades today.

Has the bad news already been factored into the stock? Perhaps. The shares do seem reasonably priced.

Happier times will come to Toll eventually. It's just a question of when.

Is Toll Brothers a buy? originally appeared on BloggingStocks on Thu, 24 May 2007 09:10:00 EST. Please see our terms for use of feeds.

There is a battle going on at the Federal Reserve. However, it's not the internal battle that we normally envision. This is a battle of wills between Chairman Ben Bernanke and the experts on Wall Street.

On one side, we have Dr. Bernanke, the current Chairman of the Federal Reserve. He has made it quite clear that he sees no reason to change interest rates for the foreseeable future unless economic data indicates a need to do so or a crisis occurs. He believes that the housing slowdown is contained, and that the gradual slowing of the economy should contain inflationary pressures.

On the other hand, we have the Wall Street experts. They believe that the economy is much worse than the data indicates with a potential recession on the horizon. In their view, it is only a matter of time before the Fed is forced to lower rates. By the way, Wall Street has a slight conflict of interest here since lower rates or the expectation of them in the near future will probably fuel a stock market rally.

Continue reading The Battle for the Fed: Bernanke 3, Wall Street 0!

The Battle for the Fed: Bernanke 3, Wall Street 0! originally appeared on BloggingStocks on Tue, 17 Apr 2007 13:16:00 EST. Please see our terms for use of feeds.

Home Depot sales could fall in 2007 originally appeared on BloggingStocks on Wed, 08 Nov 2006 12:41:00 EST. Please see our terms for use of feeds.

Don't expect an increase in housing starts to affect the market much originally appeared on BloggingStocks on Tue, 20 Jun 2006 10:19:00 EST. Please see our terms for use of feeds.