Homebuilder Stocks Index Completes -10% Weekly Correction

• By the tickerspy.com Staff
• On 11:47 am EDT, Friday October 2, 2009

Over the last week, some homebuilders have gotten crushed with double-digit declines.

Despite this week's announcement that August pending home sales jumped 6% to their highest level in over two years, investors are still dumping homebuilders across the board. According to The Wall Street Journal, the pending sales number was negative for the industry, as the data reflected a shift to existing homes as first-time buyers ran out of time to close before the $8000 tax credit program's November 30 deadline. While reports of a push for the program's extension are a glimmer of hope for the industry, so far investors haven't shown much optimism.

Though off their lows for the session, the majority of the sector is poised to close in negative territory, and it would take a 5% rally for even the top weekly performer to turn positive for the period.

As a whole, the Homebuilder Stocks Index completed a -10% weekly correction this morning. Though it has rebounded slightly, it still remains the worst performer of tickerspy's more than 250 sector-based Indexes for the period.

Champion Enterprises (NYSE: CHB - News), Hovnanian Enterprises (NYSE: HOV - News), and M/I Homes (NYSE: MHO - News) are all off by more than -14% in the last five sessions. The former two have now fallen by more than -24% over the last month.

Multi-billion-dollar players Lennar (NYSE: LEN - News) and Toll Brothers (NYSE: TOL - News) are down by -11% and -8.5% respectively this week. DR Horton (NYSE: DHI - News), Pulte (NYSE: PHM - News), and NVR (NYSE: NVR - News) are all more than -5% cheaper than they were a week ago.

For the last month, only Beazer Homes (NYSE: BZH - News), Cavco Industries (NASDAQ: CVCO - News), and Chinese Xinyuan Real Estate (NYSE: XIN - News) remain positive.

Investors should keep a close eye on the Homebuilder Stocks Index as more news regarding the potential tax credit extension is released.

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