- A bigger-than-expected drop in June existing home sales pulls down homebuilder stocks, with PulteGroup (PHM -6.5%) and Hovnanian (HOV -6.6%) taking the biggest hits.
- The iShares U.S. Home Construction ETF (NYSE:ITB) slips 0.7%.
- Before the June home sales number came out, PulteGroup had risen in premarket trading after Q2 earnings beat the consensus estimate as the company explained homebuyer activity picked up after a soft H2 2018.
- “Home sales are running at a pace similar to 2015 levels – even with exceptionally low mortgage rates, a record number of jobs, and a record high net worth in the country,” said Lawrence Yun, NAR’s chief economist.
- “Either a strong pent-up demand will show in the upcoming months, or there is a lack of confidence that is keeping buyers from this major expenditure," Yun added.
- Other notable movers in the homebuilder sector: D.R. Horton (DHI -1.8%), KB Home (KBH -1.7%), Toll Brother (TOL -1%), NVR (NVR -2.4%), Taylor Morrison Homes (TMHC -1.9%), and William Lyon Homes (WLH -1%).
- ETFs: XHB, ITB, PKB, NAIL, HOML, HOMZ