Homebuilder stocks fall more than 20% since May
According to Bloomberg, homebuilder stocks have fallen more than 20% since May despite home improvement retailer shares rising to a record high.
The Standard & Poor’s Supercomposite Homebuilding Index -- which includes PulteGroup Inc.,Lennar Corp. and nine other companies -- has declined 21 percent since reaching the highest level in almost six years on May 14. Meanwhile, the S&P 500 Home Improvement Retail Index -- comprising Home Depot Inc. and Lowe’s Cos. -- has risen 5.2 percent.
These two groups had been trading largely in sync since August 2011, which makes sense because they’re “from a common tree, but different branches,” said John Manley, chief equity strategist at Wells Fargo Funds Management in New York, which advises on $233.6 billion in assets.