Homebuilders underperform weak stock market

LGI Homes

21/09/2023 16:52

** Shares in U.S. homebuilders were underperforming the broader
market on Thursday with the housing index  .HGX  down 2.5% vs 1%
drop for benchmark S&P 500  .SPX 
    ** While mixed data from the National Association of
Realtors did little to inspire, investors may also have been
concerned by the Federal Reserve's indication on Wednesday that
it would keep interest rates higher for longer
    ** In August existing home sales of 4.04 mln compared with
consensus expectations for 4.10 mln and July's 4.07 mln number
but the August decline of 0.7% was slower than July's 2.2% drop 
    ** "Sales have been bouncing around at low levels throughout
the year so far and the August sales figure was one of the
lowest monthly readings we have seen in recent years. Limits in
available inventory likely are restraining sales and higher
mortgage rates likely are hurting affordability," wrote JPMorgan
economist Daniel Silver in a research note
    ** HGX, on track for its biggest one-day pct drop since
Sept. 5, fell to its lowest level since mid-June  
    ** Big decliners in the housing index were LGI Homes Inc
 LGIH.O , down 3.1%, Toll Brothers  TOL.N  off 1.8%, KB Home
 KBH.N  down 0.8%, while Pultegroup Inc  PHM.N  was off 0.9%
    ** Also under pressure was D.R. Horton  DHI.N , which
announced a CEO change late on Wednesday and was 0.3% lower
    

 (Reporting By Sinéad Carew)
 ((sinead.carew@thomsonreuters.com; +13322191897;))