The housing recovery looks like the real deal

homebuilding

With all the melodrama over fiscal cliff debt talks and recent market gyrations, it’s easy to overlook the positive developments emerging in the U.S. economy. Perhaps the biggest is the solid evidence that a recovery is underway in the scorched American housing market.

An array of data points released in recent weeks suggest the sector has indeed turned a corner. Residential construction contributed 0.3% to the 2% third quarter advance in GDP, according to Bloomberg. Here are four charts that underscore the trend.

US housing starts for October rose 3.6% to an annual rate of 894,000 – a four year high:

US Housing Starts Chart

US Housing Starts data by YCharts

Sales of existing U.S. homes were up 11% in October, year-over-year:

US Existing Home Sales Chart

US Existing Home Sales data by YCharts

The closely-watched Case-Shiller Home Price Index – calculated from data on repeat sales of single-family homes  – has been up for the last five months, and registered a 2.25%-plus increase in the second quarter of 2012 over the previous three-month period:

Case-Shiller Home Price Index: National Chart

Case-Shiller Home Price Index: National data by YCharts

Not surprisingly, the pickup in home construction and prices have lit a fire under housing stocks. Here’s the performance of Toll Brothers (TOL), Lennar (LEN) and D.R. Horton (DHI) relative to the S&P 500 Index (SPX) for the past 12 months:

TOL Chart

TOL data by YCharts

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