Warning Rocks Big Home Builders
Investor’s Business Daily
July 17, 2006
A downward revision in DR Horton’s 2006 earnings forecast pushed down the stock prices of several other residential home builders. The country’s biggest home builder expects profits to fall 20.5 percent because of an increase in inventory and cancellation rates. The company’s stock plummeted 7.5 percent to a nearly two-year low on the news. Beazer Homes posted a 5-percent drop in stock price after the announcement, while KB Home and Pulte Homes registered decreases of 4 percent and 3.5 percent, respectively.
Home Builders Expect Slowdown
Wall Street Journal
July 13, 2006
Spence, John
The National Association of Home Builders has issued a report predicting a drop in residential price appreciation and new construction to more sustainable levels due to rising interest rates. According to NAHB chief economist David Seiders, “Each market has different factors that affect its local economy and housing market, but overall we are forecasting an orderly slowdown in housing starts.” California is among the states that will experience declines, mainly because home prices and the overall cost of living have soared in recent years. However, NAHB anticipates a jump in residential building this year in Idaho, North Carolina, Oklahoma, Washington, and Wyoming.
