As I drove through the greater Denver area this weekend I was inundated with a sea of house for sale, open house, and price reduced signs. There were so many signs planted in yards that it looked like an election year. Just a few months ago houses were selling above the asking price in no time flat. So I thought to myself, "This doesn't bode well for existing home sales on Tuesday."
Much to my dismay, existing home sales climbed to a record 5.50 million units in August, a 5.8% increase from July. All regions posted gains, and median house price rose to $154,700. There was however 8% more homes put on the market, which increases inventories to a 4.8 month supply form 4.6. Low mortgage rates continue to spur demand, and keep home building stocks afloat.
KB Home Daily Chart
KB Home (KBH) has had an up and down summer, but just when it looks like this stock is going to lose support at $25, it manages to bounce. This current bounce is having trouble filling the gap that formed on 9/17, and the 50-day and 200-day moving averages should also limit the height of any bounces.
Beazer Homes Daily Chart
Beazer Homes (BZH) has found some support at $40, and is trying to recoup some of last week's losses. BZH is currently running into resistance at the 200-day moving average, and resistance at $55.55 should be even tougher.
DR Horton Daily Chart
DR Horton (DRI) heard a who at $18, and quickly reversed its steep drop. $20.50 looked like a tough obstacle, but DRI has taken out that resistance level today. $23 might be a tougher test.