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Homebuilders share prices spike, despite slump

July 25, 2012 03:00PM

How can homebuilders be on track to have their most profitable year on record when the U.S. is still in the depths of a housing slump? A backlog of housing demand, which may herald a healthier housing market, Bloomberg Businessweek reported.

Homebuilders Lennar and Toll Brothers are showing 54 and 48 percent increases in the value of their shares in 2012, respectively. That is because the 145,000 homes available nationwide in May represent the lowest inventory on record in that last 50 years, according to analyst David Dwyer of Bloomberg Industries.

“This industry,” Dwyer told the magazine, “has historically moved long before the actual financial results.” [Businessweek] – Guelda Voien