Home Builder Stocks Surge

March 12, 2012

A growing number of reports are revealing higher interest from buyers in real estate, prompting an analyst with Credit Suisse to upgrade five homebuilder stocks, sending several builder stocks soaring Friday.

Three stocks — DR Horton Inc., Lennar Corp., and Toll Brothers Inc. — were upgraded to “outperform” from “neutral.” Builder stocks Meritage Corp. and Ryland Group Inc. were also raised from “underperform” to “neutral.” 

Analyst Daniel Oppenheim, who upgraded his ratings, says he expects homebuilder stocks to rise 18 percent this year and 19 percent in 2013. 

Oppenheim says recent surveys of real estate agents have revealed that buyer traffic is strong. In fact, he says one recent buyer index survey reached its highest point since 2005, the year the survey began and also during the housing boom.  

"Should the stronger traffic trends continue, we should see potential for a further upside to volume," Oppenheim said about the homebuilder stocks.

Source: “Builders Rally on Improved Real Estate Outlook,” The Associated Press (March 9, 2012)

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