PulteGroup, Inc (NYSE:PHM) will have to pull itself out of the trough
PulteGroup, Inc (NYSE:PHM) has been going through a great deal of upheaval lately. From a technical perspective, it could be a stock to steer clear of. This is due to the fact that the company has been experiencing negative trends on the moving-average crossover front. Over the past 4 weeks, the stock has shed 22.7%.
In addition, at the moment, the company has been graded as a “strong sell” by Zacks which indicates that this is probably the best time to get out of the stock which is potentially in trouble. The Department of Commerce had declared that new-home sales had increased by 35 percent last month and stockholders were hopeful of an exemplary Q2 results from home construction companies like PHM.
The downward trend
The National Association of Home Builders index climbed by 3 points from the downwardly-revised 56 in July, up to 59 in August. The reading that came in last month has been the peak of the index since 2006 January. In July, sub-indexes that measure current sales-conditions and sales projections stood at 62 in July.
There was a 1 point rise in sales expectations readings and it touched 68. The sub-index that is an estimation of prospective buyer-traffic stayed steady at 45. The readings for sales projections stand at the highest levels since March. The NAHB reported on Tuesday that there has been a dip in housing affordability right across the United States.
A definite dip
In the 2013 Q2, 63.3% of existing and new homes that were sold could be afforded by families who had a $64,400 median income which was a dip from 73.7% in the Q1. This is also the first time that the index has dipped below 70% since the latter part of 2008. Home prices are on the rise and mortgage-loan rates have started to strain homesales. There was a brief peak in share prices for publicly-traded home builders like PulteGroup, Inc (NYSE:PHM).