More Gains In Store For Homebuilders
Kiplinger's Personal Finance|August 2018

The housing market reached a milestone in January that al-most no one noticed. The S&P CoreLogic Case-Shiller Composite, an index that tracks average home prices in 20 U.S. cities, finally rose above the record set in April 2006. Is it cause for celebration or trepidation?

James K. Glassman
More Gains In Store For Homebuilders

A bit of both. The good news is that more Americans are getting a home of their own, and those who already have one are seeing the value of a valuable asset rise. The bad news is that, by historical standards, homes may be getting too expensive. “Of the nation’s 50 largest housing markets, 52% were considered overvalued in April,” reported CNBC, drawing on a housing consulting firm’s analysis.

After the housing bubble popped in 2006, prices continued to drift lower for years, not reaching bottom until 2012. Since then, they have risen more than 50%. And the boom shows no signs of abating. It costs, on average, 6.9% more to buy a house than it did a year ago.

Companies that buy land and build homes on it have been huge beneficiaries. PULTEGROUP (SYMBOL PHM, $30) more than doubled its revenues from 2011 to 2017, and the Value Line Investment Survey expects growth of 12% this year. Home builder stocks have extreme ups and downs. Although I like to buy shares of good companies and hold on through thick and thin, perseverance is nearly impossible with most home builders. This sector is among the few in your portfolio that can be bought and sold and bought and sold again. (Stocks I like are in bold; prices are as of June 15.)

A good call. There are times when the world gives up on home builders, as though no one will ever construct or sell a new house again. One of those times was in August 2011, when I began my column this way: “Suggest that now might be a good time to buy the stocks of home builders, and you will almost certainly be considered out of your mind.” In the wake of the recession, prices had plunged and prospects were dim.

Denne historien er fra August 2018-utgaven av Kiplinger's Personal Finance.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra August 2018-utgaven av Kiplinger's Personal Finance.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA KIPLINGER'S PERSONAL FINANCESe alt
FREE HELP FOR COLLEGEBOUND STUDENTS
Kiplinger's Personal Finance

FREE HELP FOR COLLEGEBOUND STUDENTS

This program’s mentors assist applicants as they fill out the FAFSA, write essays and more.

time-read
2 mins  |
December 2024
WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS
Kiplinger's Personal Finance

WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS

You typically need earned income to contribute to an individual retirement account, but a spousal IRA provides an important exception to this rule.

time-read
2 mins  |
December 2024
SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS
Kiplinger's Personal Finance

SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS

ET'S say you've been regularly buying shares in a booming tech company over the past few years, but now you want to start taking some of those profits, perhaps to rebalance your portfolio.

time-read
5 mins  |
December 2024
Strategies for Novice Investors
Kiplinger's Personal Finance

Strategies for Novice Investors

AS part of a lifes kills program for young, single mothers, I was asked to teach a class on how to get on top of your finances.

time-read
3 mins  |
December 2024
ANSWERS TO YOUR 529 PLAN QUESTIONS
Kiplinger's Personal Finance

ANSWERS TO YOUR 529 PLAN QUESTIONS

Thanks to recent policy changes, families have more options for what to do with money sitting in these tax-advantaged accounts.

time-read
6 mins  |
December 2024
Rate-Cut Winners and Losers
Kiplinger's Personal Finance

Rate-Cut Winners and Losers

NOW that the Federal Reserve has cracked the interest rate ice, the next development will be to separate winners from losers.

time-read
2 mins  |
December 2024
SHOULD YOU BUY THESE RED-HOT FUNDS?
Kiplinger's Personal Finance

SHOULD YOU BUY THESE RED-HOT FUNDS?

Covered-call ETFs are popular but come with plenty of caveats.

time-read
6 mins  |
December 2024
DIVIDEND STOCKS ARE READY TO REBOUND
Kiplinger's Personal Finance

DIVIDEND STOCKS ARE READY TO REBOUND

Our favorite dividend payers are poised to benefit as falling interest rates lure investors back.

time-read
10+ mins  |
December 2024
IS A 55+ COMMUNITY RIGHT FOR YOU?
Kiplinger's Personal Finance

IS A 55+ COMMUNITY RIGHT FOR YOU?

These age-restricted developments appeal to older adults seeking abundant amenities and an active lifestyle.

time-read
8 mins  |
December 2024
AT LONG LAST, RATES ARE DROPPING
Kiplinger's Personal Finance

AT LONG LAST, RATES ARE DROPPING

Consider these portfolio moves now that the Federal Reserve has cut its benchmark interest rate.

time-read
4 mins  |
December 2024