Despite ongoing optimism that the housing recovery can withstand fire, brimstone, rising rates, and collapsing confidence (in spite of the fact that indications from most top-down data are to the contrary), investors in US homebuilders may need to adjust this morning. If DR Horton is any indication of a broad trend (and empirical comparisons with its peers show that it is) then the firm’s huge miss in its cancellation rate (31.0% vs an expectation of 25.5%) in Q3 should be food for thought. The surge in cancellation was the largest MoM since mid-2008 and jumped to its highest since December 2008.
Does make one wonder if the lagged response to the surge in rates and collapse in applications is now catching up…
via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/7_EF1AAYYqo/story01.htm Tyler Durden