A luxury log home at the Wisp Resort in McHenry, Md., for sale.(Photo: Patrick Semansky, AP)
WASHINGTON -- Confidence among U.S. homebuilders rose this month
to its highest level in six and a half years, driven by strong demand
for newly built homes and growing optimism that the housing recovery
will strengthen next year, according to a widely followed private survey
The National Association of Realtors also said Monday
that sales of previously occupied homes rose solidly in October, helped
by improvement in the job market and cheap mortgages.
2.1% to a seasonally adjusted annual rate of 4.79 million. That's up
from 4.69 million in September, which was revised lower. The sales pace
is roughly 11% higher than a year ago. But it remains below the more
than 5.5 million that economists consider consistent with a healthy
Superstorm Sandy delayed some sales in the Northeast, the
Realtors' group said. Sales fell 1.7%, the only region to show a
decline. Most of the drop was due to the storm, but those sales will
likely be completed in future months, the group said.
homebuilder sentiment, the National Association of Home Builders/Wells
Fargo builder sentiment index increased to 46, up from 41 in October.
That's the highest reading since May 2006, just before the housing
bubble burst. Readings below 50 suggest negative sentiment about the
housing market. The index last reached that level in April 2006. Still
it has been trending higher since October 2011, when it stood at 17.
measure of current sales conditions rose this month by 8 points to 49,
the highest level since May 2006. The survey is based on responses from
There have been other positive signals from the
housing market. Applications for mortgage loans to buy homes jumped 11%
the week ended Nov. 9, compared with a week earlier, the Mortgage
Bankers' Association said last week. Purchase applications are up 22% in
the past year.
Foreclosures are slowing. The number of properties
that began the foreclosure process in the first 10 months of the year
fell 8% compared with the same period last year, RealtyTrac said last
Home prices have been rising steadily, though they remain
lower than they were six years ago. And builders broke ground on new
homes and apartments at the fastest pace in more than four years in
September. The jump could help boost the economy and hiring.
the market has a long way back to full health. Many potential home
buyers cannot meet stricter lending standards or produce larger down
payments required by banks.
Federal Reserve Chairman Ben Bernanke
said Thursday that banks' overly tight lending standards may be
preventing sales and holding back the U.S. economy.
Meantime, Lowe's (LOW)
said Monday that its third-quarter net income surged 76%, helped by
lower costs and higher revenue, as the company's efforts to revamp its
merchandise and prices appeared to be gaining traction.
adjusted earnings without charges and its revenue both beat Wall Street
forecasts. Its shares were up 7% in trading Monday. Its shares peaked
for the past year at $33.63 on Nov. 2 and traded as low as $22.39 last
Lowe's has been retooling its pricing strategy, and last
summer returned to offering permanent low prices on many items across
the store, instead of offering fleeting discounts. But the changes have
been slow to catch on, and last quarter Lowe's said it could take until
the middle of next year to reap the benefits of the strategy.
are keenly focused on improving our core business," said CEO Robert A.
Niblock. "Our level of execution is improving and we delivered solid
results in the third quarter."
The results are also the latest
indication that home-improvement retailers and other housing-market
related companies are benefiting from the beginning of a rebound in the
housing market, with home prices and home sales growth both improving.
week rival Home Depot reported slightly higher third-quarter net income
and the company raised its full-year forecast. Home Depot also
benefited from a surge in sales late in the quarter from Superstorm
Sandy preparations. Lowe's did not point to any benefit from the storm
in its earnings release.
Lowe's earned $396 million, or 35 cents
per share, for the three months ended Nov. 2. That compares with $225
million, or 18 cents per share, a year ago.
The current quarter
includes charges that lowered earnings by 5 cents per share. In the
prior-year period, charges reduced earnings by 18 cents per share.
The adjusted earnings of 40 cents per share beat the 36 cents per share that analysts polled by FactSet predicted.
Revenue rose 2% to $12.07 billion from $11.85 billion. That also beat Wall Street's estimate of $11.93 billion.
at stores open at least a year, a key gauge of a retailer's health,
increased 1.8%. At its U.S. stores, the metric climbed by the same%age
rate. This figure excludes results from stores recently opened or
For fiscal 2012, Lowe's still expected earnings of about
$1.64 per share and revenue to be approximately the same as 2011's
$50.21 billion. Analysts forecast earnings of $1.66 per share on revenue
of $50.1 billion.
Lowe's Cos., which is based in Mooresville, N.C., has 1,750 stores in the U.S., Canada and Mexico.