Sood thinks the housing market’s main problem is a lack of demand, rather than too much supply amid foreclosures. “Thus, our concerns stem mainly from whether or not the economy can maintain enough momentum to reverse the extremely depressed pace of household formations we have seen over the past five years.”
Other analysts disagree and say that the last thing the market needs is more housing starts with inventories already inflated.
In homebuilder stocks, DR Horton (NYSE: DHI) rallied 5.7% on Tuesday, while Toll Brothers (NYSE: TOL) and PulteGroup (NYSE: PHM) both rose 3.5%.
SPDR S&P Homebuilders ETF
