Despite reports earlier in the week that housing starts are down and builder confidence is sagging, homebuilder stocks continued to outperform the overall stock market, according to financial media company The Street.
The PHLX Housing Sector Index, which includes the largest public builders—D.R. Horton, Hovnanian Enterprises, KB Home, Lennar, PulteGroup, and others—has shown a year-to-date gain of 5.6%. The S&P 500’s gain is 0.7%.
Lennar, Ryland Group, and Toll Brothers are the top industry performers in the stock market, while D.R. Horton, KB Home, and PulteGroup are down so far this year.
Lennar got a lot of attention Thursday when it reported better-than-expected quarterly profits and revenues, and its CEO, Stuart Miller, said he is optimistic about a strong spring selling season.
Miller said he believes housing will rebound from a 17% February dip in housing starts, which was reported Tuesday.
Lennar’s success is largely due to its ability to raise prices on new, single-family homes as it builds for buyers who can afford move-up and luxury homes. The big builder also has ventured into the rental market by building apartment buildings and opening a community of for-rent single-family homes in Nevada in mid-March.