LOS ANGELES (AP) — Shares in homebuilders tumbled Tuesday following the release of a report showing home prices have declined across many major U.S. cities to their lowest levels since the housing downturn began.
The Standard & Poor's/Case-Shiller 20-city home price index fell 1 percent in December from November, with prices declining in all but one of the metropolitan markets tracked.
Home prices dropped to their lowest point since 2006 and 2007 in 11 markets, including Atlanta, Charlotte, N.C., Chicago, Detroit, Las Vegas and Miami.
Analysts expect further home price declines this year.
That would put more pressure on homebuilders. They are counting on a strong spring home-selling season after seeing their sales fall sharply in the last half of 2010.
In recent weeks, several large homebuilders reported sharp drops in home deliveries and contracts for new homes during their latest quarters.
Shares in Meritage Homes Corp. fell $1.80, or 6.6 percent, to $25.54. The stock also was weighed down by Citigroup analyst Josh Levin's decision to downgrade the stock to a "Hold" from "Buy." He noted the stock's price was nearing his price target of $28 and that he didn't expect an upcoming analyst event to provide a boost to the stock. He still rates Beazer Homes USA Inc. and Toll Brothers Inc. "Buy."
Beazer shares slid 28 cents, or 5.5 percent, to $4.89, while Toll Brothers Inc. fell $1, or 4.6 percent, to $20.84.
Elsewhere in the sector, Hovnanian Enterprises Inc. fell 35 cents, or 7.8 percent, to $4.14; Ryland Group Inc. fell $1.22, or 6.4 percent, to $17.71; D.R. Horton Inc. slipped 83 cents, or 6.5 percent, to $11.97; PulteGroup Inc. shed 54 cents, or nearly 7 percent, to $7.24; KB Home fell 95 cents, or 6.5 percent, to $13.74.
Lennar Corp. declined $1.13, or 5.4 percent, to $19.92; Standard Pacific Corp. fell 26 cents, or 6 percent, to $4.10; and M.D.C. Holdings Inc. slipped $1.34, or 4.8 percent, to $26.67.
by The Associated Press February 22, 2011
Homebuilder stocks plunge after home price report - Bloomberg
