The Buzz

All markets and investing news all the time

Is the homebuilder rally for real?

August 22, 2012: 1:55 PM ET

Shares of homebuilders rallied Wednesday after Toll Brothers reported strong quarterly results and an industry group said home sales rose in July.

The nation's leading luxury homebuilder reported a 46% jump in net income to $61.6 million in the quarter ended July 31. Toll Brothers also said new contracts rose 57%, and its contract backlog grew 44% during the quarter.

Toll Brothers (TOL) stock gained nearly 4% Wednesday. Shares of Hovnanian (HOV), D.R. Horton (DHI) and KB Home (KBH) were also higher.

The homebuilding sector was also supported by a report from the National Association of Realtors, which showed sales of existing homes rose 2.3% in July

StockTwits users debated the merits of the rally.

BrantleyFoster: $TOL i see this back to $26 ... riding on hopium b.s.

buyhighsellhigh: @BrantleyFoster $TOL There is also no hopium. It"s a FACT that they beat earnings estimates, huge increase in profit, and record demand.

That's a good point. As housing has slowly started to recover, Toll Brothers' stock has steadily climbed higher, gaining more than 60% from the start of the year.

edwardnh:Toll Brothers earnings commentary was very bullish on housing http://t.co/jNiCWCvr $TOL

JimCramer: $TOL says best demand in five years. But is it good enough in a market that is suddenly demanding a breather?

Housing has taken such a beating that this time, the turnaround may be for real.

himtam: $TOL Moving forward as economy gets stronger, Tol gets benefits as people move up & new purchases!

And that may put a temporary crimp in the bigger picture of the housing recovery.

PelzOptions: $TOL hate to say this but it looks like this may continue to run to the upside -- will delay short entry here for awhile ...

Join the Conversation
Fear & Greed
Sponsored by
About This Author
Ben Rooney
Ben Rooney
Staff writer, CNNMoney

Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news. Follow Ben on Twitter: @ben_rooney

To view my watchlist

Not a member yet?

Sign up now for a free account
Stupid Stock Move of the Day
#StupidStock Moves of the Day! $CAT $JOY up 4%? China rate cut may eventually help. But it's also reflection of weaker Chinese economy now.
Powered by WordPress.com VIP.
Follow

Get every new post delivered to your Inbox.

Join 242 other followers