Housing stocks have rallied, but could start falling again, Barron’s says

That the housing market is weak-and housing stocks with it-is not breaking news, Ben Levisohn writes in this week’s edition of Barron’s. Recent housing data confirms just how bad it is out there, and housing stocks already reflect a lot of the pain, the author says. D.R. Horton (DHI) and PulteGroup (PHM) have both dropped 23% this year, while Toll Brothers (TOL) has slumped 36%. That was actually an improvement over where the losses were at the start of the week thanks to a CPI-inspired rally, which saw Pulte jump 13% and D.R. Horton and Toll Brothers gain 11%, the publication adds. And those gains mean home-builder stocks aren’t nearly as cheap as they were just a few days ago, Levisohn writes. For a sustained rally, the home-builder stocks need to have visibility on the course of inflation and rate hikes, visibility that probably doesn’t exist yet despite the stock market’s enthusiastic reaction to Thursday’s CPI, he adds. Reference Link