Already weak index of home builder confidence falls to 13 - BUT HOME BUILDER SHARES GO UP

Using the word "confidence" in the same sentence with the index number of 13 is kind of like an oxymoron. Perhaps they should change the name of this index to the "un-confident" index instead of the "confidence" index?

6-15-11 10:00 AM EDT

WASHINGTON (MarketWatch) -- The already-weak index of builder confidence for new single-family homes fell 3 points in June to 13, the lowest reading since Sept. 2010, according to the National Association of Home Builders/Wells Fargo Housing Market Index. Economists polled by MarketWatch had expected a 16 reading. "Builders are being squeezed by the continuing weakness in existing-home prices - against which they must compete -- as well as rising material costs," said NAHB Chairman Bob Nielsen, a home builder from Reno, Nev. The worst-ever reading was 8 in Jan. 2008, and the gauge hasn't been above 50 since April 2006. The HMI is a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.

AND, NOW I SHOULD MENTION THIS ARTICLE (SEE BELOW) THAT I FOUND AFTER I POSTED THE INFO THAT APPEARS ABOVE.

HOME-BUILDER CONFIDENCE INDEX CAME IN VERY LOW, BUT, OF COURSE, SENTIMENT FROM INVESTORS – ABOUT HOME-BUILDING COMPANIES – GOES UP. WTF?

Sector Trends: Housing Stocks Advancing On Data (RDN, MTH, DHI, HOV, LEN, PHM)

6/16/2011 11:31 AM ET

(RTTNews) - While most of the major sectors are showing only modest moves on Thursday, considerable strength has emerged among housing stocks. The strength in the sector reflects a positive reaction to relatively upbeat housing starts data released before the start of trading.

Reflecting the strength among housing stocks, the Philadelphia Housing Sector Index has surged up by 1.6 percent on the day, bouncing off the six-month closing low set in the previous session.

The strength in the sector comes after a report from the Commerce Department showed a modest increase in new residential construction in the month of May, with the increase in housing starts partly offsetting the sharp drop seen in the previous month.

The report showed that housing starts rose by 3.5 percent to an annual rate of 560,000 in May from the revised April estimate of 541,000. Economists had expected housing starts to increase to 547,000 from the 523,000 originally reported for April.

Additionally, the Commerce Department said that building permits rose by 8.7 percent to an annual rate of 612,000 in May from the revised April rate of 563,000. Building permits are seen as an indicator of future housing demand.

Radian Group (RDN) is turning in one of the sector's best performances, with the mortgage insurer currently up by 4.7 percent.

Homebuilders Meritage Homes (MTH) and D.R. Horton (DHI) have also shown strong upward moves, advancing by 3.7 percent and 3.4 percent, respectively.

Hovnanian (HOV), Lennar (LEN) and PulteGroup (PHM) are also posting notable gains, contributing to the strength in the housing sector.

by RTT Staff Writer

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