Toll Brothers (NYSE: TOLL)
reported earnings that came in well ahead of analyst estimates -
the latest sign that we may be in the midst of a full-on
The company's adjusted fourth-quarter earnings of 35 cents per
share was 10 cents better than Wall Street's 25-cents-a-share
forecast. Toll Brother's revenue also rose 48% from the same
quarter a year ago, exceeding analyst expectations by close to
The sunny earnings report pushed TOLL shares up as much as 1%
in early Tuesday trading. For the year, the stock is up an
astonishing 54% even after a recent pullback.
Toll Brothers hasn't been the only housing stock to rally this
Home Depot (
shares are also up 54%, while
has climbed 41%.
ITB and XHB
- the two benchmark exchange-traded funds that track housing
stocks - are up 69% and 51%, respectively, in 2012.
But the real signs of a housing recovery have been in the hard
data, not the rising price of housing stocks. Home prices are up
3.6% from a year ago, rising each of the last six months.
Existing-home sales were up 11% in October. New-home sales
increased 4% from the second quarter to the third quarter.
Foreclosures are slowing.
And despite the recent ascension in home prices, housing is
the most affordable it's been in decades, as the average 30-year
fixed mortgage rate is near record lows at 3.4%. With the U.S.
economy improving, that should convince more and more people to
Consequently, companies like Toll Brothers should continue to
profit. And housing stocks should continue to rise.