Builders Slide After Weak New Homes Report

[Stocks-to-Watch]

Home builders were falling in early trading following a report from the Commerce Department that said new home sales fell 2.2% in December to a seasonally adjusted annual rate of 307,000.

Builders have gained some momentum in recent months as data showed an uptick in the housing market. In particular, November new home sales rose to their highest level since April. In the past three months, many home builder stocks have shown strong gains, with Lennar (LEN) up 36% in the period.

But stocks in the sector are sliding in the wake of the new report. NVR (NVR), for instance, is down 3.6%.

“This is a weaker report on housing activity than other recent releases (homebuilder sentiment, single-family housing starts, building permits, existing home sales). *New home sales continue to bounce around at low levels—the 307,000 reading for December is little different than the 309,000 average for the fourth quarter and the 303,000 average for 2011 as a whole,” wrote economists at RDQ Economics.



Original Article Source by Barrons.com