Home builder shares have risen to record levels this year as a rebound takes shape in the new-home market, following one of its worst years on record, Bloomberg reports.
The Standard & Poor’s Supercomposite Homebuilder Index has risen 53 percent this year. The index includes 11 home building companies.
For example, PulteGroup shares have soared 98 percent this year, Lennar has risen 59 percent, Toll Brothers has increased 49 percent, and D.R. Horton has soared 43 percent, Bloomberg reports.
As the new-home market takes recovery mode, some builders have been raising their prices as inventories of homes for-sale in many markets shrinks.
“We’re getting more activity, more traffic and even pricing has begun to improve,” Jason Benowitz, portfolio manager for Roosevelt Investments, which includes a share in Lennar Corp., told Bloomberg. “If the economy can muddle along, then we think housing will continue to be a bright spot. And the home builder stocks have room to run from here.”
Some experts have been predicting a looming housing shortage, with estimations of 1.7 million and 1.8 million new homes a year needed to meet future demands with population growth and aging home stocks.