Housing stocks may benefit from new data - New York Report

HOUSING stocks could be in for a boost if September data due out next week confirms strength that market watchers expect.

Home buyers returned from summer vacations to lower mortgage rates and increasing rents, and may have moved back into the market after staying away in August.

Shares in the sector fell in mid-to-late September after August data missed expectations.

The National Association of Homebuilders housing market index measuring seller sentiment is due out today, to be followed during the week by data that includes building permits and housing starts, mortgages, and home prices and sales.

While the PHLX index of housing stocks has risen more than 6.4 per cent so far this year, it has fallen 3.6 per cent in the last month. The index fell 9.9 percent from 16 September to 29 September, the week when August data was released.

Strength in June and July housing data may have boosted investor expectations to unrealistic levels for August, typically a slower month for housing, according to Susan Maklari, housing equities analyst at UBS in New York.

Since the Labor Day holiday in early September, Maklari has seen signs of improvement in channel checks around the country.

“You’re going to see growth year-over-year coming through. It’s probably going to be in line with what people would expect for September, maybe a little bit better than that,” she said.

Maklari cited strength in western US markets such as California, where the technology sector is boosting employment and salaries.