New York City, New York - The housing market has continued its recovery from last year, driven by record low mortgage rates and pent up demand. Homebuilders such as KB Home (NYSE: KBH) and The Ryland Group Inc. (NYSE: RYL) benefited from the recovery in housing market last year, and the trend is expected to continue in 2013. The housing market bottomed out last year and has since been making a strong recovery. Earlier this week, a data released by Commerce Department once again highlighted the ongoing recovery in the housing market. According to figures released by the Commerce Department, construction spending in the U.S. rose 1.2% in February.
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The improvement in the housing market is being driven by record low mortgage rates and pent up demand. Mortgage rates have remained low thanks to Federal Reserve’s ultra-loose monetary policy. The Fed has kept interest rates near zero for over three years now. Meanwhile, the central bank is also continuing with its aggressive bond buying program, which includes buying $40 billion in mortgage backed securities each month.
In its most recent monetary policy meeting, the Fed once again reiterated that it plans to continue with its aggressive monetary easing measures. This will continue to benefit the housing market and homebuilders. Homebuilders were among the best performing stocks in 2012 as they benefited significantly from the recovery in the housing market. The outlook for the industry remains bullish.
Back in March, KB Home reported its financial results for the first quarter ended February 28, 2013. The company’s revenue for the quarter rose 59% to $405.2 million. During the quarter, the company delivered 1,485 homes, representing an increase of 29% over the same period in the previous year. The company’s net loss for the quarter narrowed to $12.5 million from $45.8 million. At the end of the first quarter, KB Home’s backlog rose to $703.9 million. Our free research report onKB Homecan be downloaded upon registration at
Jeffrey Mezger, President and CEO of KB Home, said that the company’s strategies targeting growth and profitability are working as evidenced by its significantly improved financial and operational results in the first quarter. Mezger said that the company’s strong first-quarter results, in combination with its strategic growth plans, the strengthening recovery of housing markets, low mortgage interest rates and firming consumer confidence, reinforce its optimism for the remainder of the year.
Elsewhere in the industry, investors are now eyeing The Ryland Group Inc.’s financial results for the first quarter. Last week, the company said that it will release its first quarter results on April 24, after market closes.Ryland Group Inc.free research is available today at
For the fourth quarter of 2012, The Ryland Group Inc. had reported net income from continuing operations of $28.9 million, or $0.56 per diluted share, compared to $1.3 million, or $0.03 per share, reported for the same period in the previous year. The company’s homebuilding revenue for the quarter rose 67.7% to $427.5 million. New orders for the quarter rose 64.1% to 1,493 units.
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