Housing Finances

Will 2012 See a Housing Turnaround?

Written by Mint.com
Published Jan 26, 2012
1 min read
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Despite mixed results in the housing sector, many homebuilder stocks are outperforming the overall market by a large margin.

A new report released Thursday showed that U.S. housing starts in December were worse than expected, posting a 4.1 percent decline after rising 9.1 percent in November.

On the other side of the spectrum, the National Association of Home Builders (NAHB) announced last week that its housing market index beat expectations and rose to its highest level in 4 and a half years.

Following last week’s positive news, the PHLX Housing Sector Index closed at an 11-month high of 117.56.

Could all this be perceived as the dawn of a recovery for the country’s battered housing market?

The verdict is still out. Confidence remains low from a historical perspective, although the numbers show the HGX is off to its best start ever this year — up more than 14 percent.

Nonetheless, the HGX has ended four of the past six years in negative territory, witnessing its worst loss in 2008 when the index closed down more than 40 percent. Will this be the year of a turnaround in housing?