Appraising the Homebuilders

This morning brought two interesting nuggets pertain to the housing market. First, the latest reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for July jumped to a reading of 57. Like a number of indices, a reading above 50 marks an expansion, while below 50 indicates a contraction. Let's put that data into perspective: July's 57 marks not only the third consecutive monthly gain for builder confidence, but it was the strongest reading since January 2006.

I'd be remiss if I didn't point out that this period includes the recent rise in mortgage rates. I continue to see the recent rise in mortgage rates as a near-term positive for getting fence-sitters into the market. I also see a continued recovery in the housing market given the multi-year low level of available housing stock at the end of 2012. While there are no publicly traded homebuilders reporting results this week (aside from banks like Citigroup (C), BB&T (BBT) and others), we'll pick up some incremental data on the health of the housing market from the rail companies, like CSX (CSX), Union Pacific (UNP) and Kansas City Southern (KSU), as well as paint companies Sherwin-Williams (SHW) and PPG Industries (PPG)....325 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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