Rallying home-builder shares got a fresh boost Monday after data showed rising confidence in the industry.
Home-builder stocks have generally outperformed the S&P 500 this year as reports have shown the U.S. housing market strengthening. On Monday, the group added to its gains, with D.R. Horton Inc. shares rising 0.9%, Lennar Corp. climbing 1.4%, Toll Brothers Inc. adding 0.9% and KB Home gaining 1%. Each of the four stocks is up double-digit percentages this year, while the S&P 500 is up roughly 7%.
The day's moves came after a report showed the National Association of Home Builders/Wells Fargo Housing Market Index, a measure of sentiment among U.S. home builders, climbed in May to its second-highest reading since 2005. Economists polled by The Wall Street Journal had expected to see the gauge hold steady.
Monday's report added to a string of upbeat readings for the housing industry. Home sales in the first quarter climbed to their highest level since the same period of 2007, the National Association of Realtors said Monday. The share of first-time buyers is rising back toward its historical average, according to data from the Census Bureau, and new households are more often choosing to buy homes rather than rent them, home-tracker Trulia said this month. That's created fresh demand for new homes, as well as lifted shares of home-improvement companies.
Data scheduled for release Tuesday could give home-builder shares another jolt. U.S. single-family housing starts are expected to have risen 3.7% in April from the previous month, according to economists polled by The Wall Street Journal.
Upbeat earnings could also boost shares of companies tied to the housing market. Home Depot Inc., whose shares are up 17% this year, is expected to report earnings Tuesday.
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(END) Dow Jones Newswires
May 15, 2017 15:15 ET (19:15 GMT)