About that ?Housing Recovery?

[Stocks-to-Watch]

Homebuilder stocks jumped yesterday on news that sentiment among builders had risen to its highest level since 2007. But today, the news reversed, as the government said new home starts fell 4.1% in December. In November, home starts had jumped to their highest level since April 2010, one of a few data points that appear to show some new resilience in the market.

Homebuilder stocks fell on the* news, but gradually recovered along with the rest of the market and were mostly down about 1% or less this morning.

The December report has some bright sides to it. Single family homes rose 4.4%, while multi-family construction (which is a more volatile stat) fell 20.4%. And while home starts are down month-over-month, they rose 25% from last December.

Permits for new single family homes rose 1.8%, while overall permits fell 0.1%.

If anything, the report adds to the uncertainty about the direction of the housing market, rather than showing a decline.

“The report shows the housing industry is still in a holding pattern,” said Mitchell Hochberg, Principal, Madden Real Estate Ventures in New York. “The shadow inventory as a result of foreclosures needs to be resolved and the jobless rate must drop considerably before the sector will see any constructive movement.”



Original Article Source by Barrons.com