Apr 27, 2009 05:15 PM

Is the Stock Market a Good Indicator of Housing Recovery?

By Building Experts Team

Beazer Homes shares jumped as much as 37% Monday, and have more than doubled in the past 3 months. On the coattails of last week’s cautious, but positive projections, we’re hoping that this is another sign of an imminent start to the housing market recovery.

Credit markets are starting to thaw and stock prices are rising. Other home builders that traded higher Monday included:

Hovnanian Enterprises Inc. up 13% to $2.68
Standard Pacific Corp. up 10% to $2.03
Ryland Group Inc. up 5% to $24.35
Lennar up 3% to $10.25

And the iShares Dow Jones U.S. Home Construction Index Fund is up 30% so far in April.

It’s certainly good news to hear the word stable when associated with a home builder, or for that matter, the word home. Last week, Moody’s increased its outlook on Lennar to stable, making it the only builder to have that rating. It might be a good time to buy a home, but is it time you to start buying in to home builders? We shall think and observe.