Do you want to hear some good news for a change?
Of course you do. So here we go...
Take a look at this chart:
The stock in this chart is in a major breakout.
It sits at a 52-week high — and is at its highest level since 2005.
In fact, a majority of the stocks in this sector are rallying, crushing the broader market.
So take a guess which stock this is...
It’s homebuilder NVR. That’s right — it’s a housing stock.
Dear reader, housing in the United States has bottomed.
A couple weeks ago, the NBC show Rock Center did a segment on the “stealth” housing bull market in the United States.
With all the doom and gloom out there, housing could be (or was) the ultimate contrarian investment. And by most metrics, housing has not only bottomed, but is now in a bull market.
Check out the latest data from around the country...
According to DQNews, which tracks housing markets:
Las Vegas-area home sales rose to a six-year high for the month of May as the number of transactions above $200,000 increased sharply from last year, making up for fairly flat sales for lower-cost properties. With foreclosure resales at the lowest level since late 2007, the median sale price rose above a year earlier for the second consecutive month, reaching a 17-month high.
In May, 4,829 new and resale houses and condos closed escrow in the Las Vegas metro area. That was up 6.1% from a revised 4,550 the month before and up 5.7% from 4,570 sales a year earlier.
Next to Phoenix, Las Vegas was ground zero for the housing boom and bust. Many homes lost 50% of their “bubble” values during the bust.
But it’s not just Vegas and Phoenix that are witnessing rebounds... it appears to be widespread.
Data coming in shows strong double-digit gains in home sales in many markets.
In Utah, May sales were up 11.8% from a year earlier. This marked the 12th consecutive month that sales have grown year over year, and realtors are saying this is the strongest January-to-May sales period since 2007.
Home sales are growing in New England as well...
In Maine, May sales shot up a staggering 32% from May 2011, and the median sales price was up by 7.4%.
Next to Maine, New Hampshire witnessed the biggest jump in sales. Home sales were nearly 28% higher from the same month a year ago.
In still-pricey Connecticut, home sales were up 12.3% from May 2011; in neighboring Rhode Island, sales increased by 15%.
Sales in Wisconsin were up 19% from May 2011, the 11th month in a row of a double-digit increase from the same month a year earlier. Median sales price rose 1.5%. Through May, sales for 2012 are up 20.2% from the same period last year.
And in Florida, May sales in Miami were up by 14% from a year earlier.
The data is confirmed by the rally in the S&P Homebuilders ETF (XHB).
Take a look at the chart:
While the S&P 500 has increased by about 6% year to date, the ETF of homebuilders' stocks has increased by about 23%.
Individual homebuilder stocks have gone hyperbolic:
- Toll Brothers is up 100% since September 2011 — and sits at a five-year high
- Lennar also sits at a five-year high — and is up 752% since late 2008
- DH Horton has reached a new 52-week high and a new five-year high
The fact that these stocks are making multi-year highs is the probably the best economic story we’ve heard next to the resurgence of American oil and gas.
Remember the old saying: "The economy doesn’t bottom until housing bottoms."
The original bull on America,
Brian is a founding member and President of Angel Publishing and investment director for the income and dividend newsletter The Wealth Advisory. He writes about general investment strategies for Wealth Daily and Energy & Capital. Known as the "original bull on America," Brian is also the author of the 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. In addition to writing about the economy, investments and politics, Brian is also a frequent guest on CNBC, Bloomberg, Fox and countless radio shows. For more on Brian, take a look at his editor's page.