Housing stocks have shown a notable move to the downside over the course of morning trading on Tuesday, contributing to the pullback by the broader markets. The weakness in the housing sector may be partly due to the release of a disappointing report on home prices.
Reflecting the weakness in the housing sector, the Philadelphia Housing Sector Index has tumbled by 1.8 percent, pulling back further off the eleven-month closing high it set last Wednesday.
Meritage Homes (MTH) is turning in one of the housing sector's worst performances, with the homebuilder down by 10.2 percent. With the loss, Meritage is pulling back further off last Wednesday's four-year closing high.
The loss by Meritage comes after the company reported a fourth quarter loss of $11.8 million or $0.36 per share compared to a year-ago loss of $895,000 or $0.03 per share.
Radian Group (RDN) and Lennar (LEN) are also posting notable losses on the day, falling by 5.5 percent and 3.4 percent, respectively.
As mentioned above, the weakness among housing stocks comes following the release of a report from Standard & Poor's showing that home prices in major U.S. metropolitan areas fell by more than anticipated in the month of November.
The report showed that the S&P/Case-Shiller 20-City Composite Home Price Index fell by 0.7 percent in November on a seasonally adjusted basis. Economist had been expecting the index to decrease by about 0.4 percent.
Compared to the same month a year ago, the 20-City Composite Home Price Index was down by 3.7 percent compared to a 3.4 percent drop in October.
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