On Saturday we pointed out how the homebuilders — as measured at least by the homebuilder ETF XHB — is getting close to a 4-year high.
Well part of it obviously is the general uptrend in housing starts over the past year.
And that’s through December, but it looks like January is going to be strong as well.
Citi’s Josh Levin, CFA reports on his latest survey of homebuilders.
Our private homebuilder survey suggests that nationwide new home sales in January were higher compared to sales in December. While our discussions with private homebuilders skew more towards qualitative commentary than a quantitative survey, we note that ~60% of the homebuilders with whom we spoke reported that January sales were higher relative to December sales. Of the remaining homebuilders, ~20% indicated that January sales were flat m/m while ~20% said that sales were lower. (We note that nationwide, January new home sales have historically been on average ~10% higher than December sales.) Comments were the most bullish we have heard since the early spring of last year. We note that a handful of builders commented that sales growth was also strong on a y/y basis which matches comments made by MDC that its January sales were up ~30% y/y. ~75% of respondents commented that traffic increased m/m. Many homebuilders indicated that “2012 is off to a good start.” Some homebuilders said that “unusually good weather” contributed to the pick-up in sales and traffic.
And as for pricing:
Our survey suggests that new home prices and incentives were effectively unchanged in January relative to December. ~75% of our survey respondents said that they did not change prices or incentives during the month. ~5% said they lower prices or increased incentives while ~20% said that they raised prices or lowered incentives. Talk of having raised prices or potentially raising prices was the strongest we have heard in quite a while.