Credit Suisse feels that business will boom again for homebuilders this spring with strong demand and the right pricing in place.
Spring is traditionally the season when prospective homeowners scout around for good bargains in the housing sector.
Analyst Daniel Oppenheim said that the improvement is being seen across all markets. He upgraded KB Home (NYSE:KBH) on Wednesday to Outperform from Neutral.
Shares in KB Home rose along with shares in Ryland, Meritage and Standard Pacific which hit multiyear or yearly highs. KB Home’s shares increased 31 cents to $18.93 by late afternoon after hitting a multi-year high of $19.57 earlier in the day.
According to Oppenheim price of homes could appreciate more than expected.
Homes are now more affordable in terms of the median mortgage payment relative to the median household income, and relative to rent levels, than at any other time in several decades, he added.
He has estimated orders for new homes to rise 26 percent in 2013 and 21 percent in 2014.
Lennar Corporation(NYSE:LEN) was downgraded by CS to Neutral, but largely due to the steep rise in its stock price in the last one year which leaves it with very little headroom to rise further.
Lennar shares fell $1.04, about 2.45 percent, to $41.60. Its stock value has increased nearly 90 percent since this time last year.
Toll Brothers Inc(NYSE:TOL) fell 44 cents to $37.34 but is up roughly 68 percent since January of 2011.
Hovnanian Enterprises, Inc.(NYSE:HOV) fell 25 cents, more than 4 percent, to $5.92 as a 7-month rally appears to be slowing.
Pulte Group Inc fell 9 cents to $21.02, in line with broader market trends but still at the high end of its 52-week trading range.
M.D.C. Holdings, Inc.(NYSE:MDC) however rose 7 cents to $41.76 and have climbed steadily throughout the year.