Homebuilder shares edge up

Source: Construction Digital

Date :10/8/2008 11:57:52 AM

Major homebuilders' stocks were trading slightly higher on Wednesday, October 8, after coordinated rate cuts by the Federal Reserve and other global central banks.

The Dow Jones US Homebuilders index rose about one percent in morning trading.

Atlanta-based Beazer Homes USA Inc posted the strongest gains among the top 10 builders, rising about five percent to US$5.02.

Lennar Corporation shares were up 2.8 percent at US$10.74, a day after the nation’s second largest builder cut its dividend 75 percent to four cents per share, to “preserve cash to fund future operations and opportunities,” Chief Executive Stuart Miller said.

The biggest US builder, D.R. Horton Inc, halved its dividend in May and others may well need to follow suit, said Morningstar analyst Eric Landry. "It's likely that these home builders are going to enter an even more difficult period in terms of cash generation," Landry added.

Among the top 10 builders, Centex Corp, Pulte Homes, KB Home, The Ryland Group and M.D.C. Holdings Inc paid out dividends.