Stock Option Trading News

Home Construction is Rebounding: Time to Invest?

In light of the slight upswing of the national economy, the housing market has begun to follow suit. According to the Commerce Department, construction of new homes has risen 17.2 percent in the last month, higher than the rate economists predicted following April’s record low. This, combined with the steady increase of building permits issued, is a good indication that home construction is and will be experiencing resurgence in the near future. The construction of multi-family homes has seen the greatest increase in the last month at 61.7 percent with single-family homes rising 7.5 percent. Further positive news, is that the wholesale price remains in check, despite this increase in construction. As the market slowly improves, well-established major homebuilders have demonstrated the smallest quarterly losses throughout the economic downturn.

Toll Brothers

Toll Brothers Inc. (TOL) is one such company. In addition to single-family homes, the company has been converting existing apartment buildings into luxury condominiums and town homes. With the increase in demand for multifamily homes, Toll is in line to for continued improvement. The greatest construction increase has occurred in the west, at 28.6 percent this month. Toll is aligned with this trend, currently building in California, Nevada, Arizona, and Colorado. Fortune Magazine’s comprehensive list of World’s Most Admired Companies 2009 rated Toll Brothers Inc. number one in five out of nine categories among homebuilders. Financial soundness and long-term investment were two of the categories in which Toll took first.

Sign up now for PowerOptions 14-day free trial

Hovanian Enterprises

Hovnanian Enterprises Inc. (HOV), is another company reporting minimal quarterly losses, and an increase in prospective buyers visiting their model homes nationwide. Consisting of a homebuilding as well as a financial operation, the company provides its own mortgage loans and title services to its home construction customers. Hovnanian’s stock value rose steadily through the months of March and April, and has remained stable since. Another company building attached condominiums and town homes, Hovnanian’s construction occurs primarily along the eastern seaboard, although they are currently in eighteen states across the nation.

See what the stock option experts are doing
Sign up now for PowerOptionsApplied 30-day risk free trial


In regards to financial soundness and long-term investment, NVR Inc. (NVR) ranked second on Fortune’s list. Operating in twelve states, three of NVR’s four home divisions specialize in first time homebuyers. In light of the tax incentives in place for these consumers, it is likely that NVR Inc. will continue this success.

Free stock option newsletter
» return goal > 2% / month
» works in any market

As the country gradually recovers from the recession, the home construction market is destined to improve. Well-established, financially stable companies are safe investments in this time of transition. While economists predict that home prices will not see significant gains until summer of 2010, they also project that home construction in general will stop falling this quarter. Despite its slow progress, the housing market is on its way up, and is destined to return to its prior splendor once again.

Want to protect your portfolio/401K from market downside?
yet still benefit from market upside
Sign up now for the free Sketch

Investors considering investing in homebuilders might consider options trading to protect their investments, as the sector could see some continued volatility. A put option can provide insurance if a stock investment drops. A stock investment combined with a put option is known as a married put. A married put strategy can be combined with an income generating strategy to generate monthly income which is protected from a bearish stock market. A covered call investing strategy is an example of an income generating strategy which can be used in combination with a married put strategy to generate income while also being protected.

Learn how to profit from winner stocks
and protect yourself from loser stocks
Download free Trade Simulator now

For more information about how to identify and research great option trades, visit the PowerOptions website. There you will find the data you need to make quick, clear, and informed decisions. You can trade knowing you have found the best investment. Also, PowerOptions will allow you, with a few quick clicks, to quickly and accurately compare trades. PowerOptions’ premium customer support is second to none in the industry. They can be easily contacted when you need them at their toll-free number to answer customer questions. Call them now toll free at 877-992-7971.

Learn to trade like the pros
Signup for free Webinars now

PowerOptions provides a free 14-day trial of its service. So join PowerOptions today, and you too can start reaping the benefits of the covered call investment strategy.

PowerOptions’ sister company PowerOptionsApplied provides expert stock option trading recommendations. PowerOptionsApplied specializes in covered calls, naked puts and iron condor stock options strategy recommendations. PowerOptionsApplied provides a 30-day risk free trial of its service.

[tags] housing market, Commerce Department, single-family homes, condominiums, California, Nevada, Arizona, Colorado, Fortune Magazine, mortgage loans, title services, HOV, Hovnanian Enterprises Inc., TOL, Toll Brothers Inc. [/tags]

Leave a Reply

Your email address will not be published. Required fields are marked *