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Housing Data Softens; Markets Eke Out Gains

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Tuesday, February 18, 2025

Market indexes closed today’s regular trading session on a strong upswing that brought levels back near morning highs. That said, we lost the exuberance today’s pre-market trading had been enjoying. The Dow closed +10 points as of the closing bell, with the S&P 500 and Nasdaq both at +14. The small-cap Russell 2000 is the only index higher than where we saw it ahead of the open: +10 points.

Homebuilder Confidence Drops Off


February results from the latest NAHB/Wells Fargo Housing Market Index were a bit of a disappointment earlier today, coming in at 42 versus an expected print of 46 — both down from the unrevised 47 the previous month, which happens to be the highest level since April of last year. Today’s 42 is the lowest result from this survey since September.

Policy uncertainties and cost factors remain current headwinds. This should not be surprising to anyone following the current housing market, with its 7% mortgage rates and low volumes.

Tomorrow morning, January Housing Starts and Building Permits will add further articulation to the housing story of early 2025. Both are expected to have ticked down from the previous month — to 1.4 million from 1.5 million on the Starts side, and 1.46 million versus 1.48 million on Permits. The 1.8 million levels we were seeing on both Starts and Permits three years ago are clearly a thing of the past.

Toll Brothers Misses Expectations, Cadence Beats but Falls


High-end homebuilder Toll Brothers (TOL - Free Report) came up short on both top and bottom lines in its fiscal Q1 report this afternoon. Earnings of $1.75 per share were well off the expected pace of $1.99 (and well behind the $2.25 per share reported in the year-ago quarter), while revenues of $1.89 billion was off by a smidge. A total of 1991 homes were delivered, missing the 2060 expected. Weaknesses were reportedly due to impairments and a transactional delay. The average price of a Toll Brothers home was $925K in the quarter.

Check out the updated Zacks Earnings Calendar here.


Cadence Design Systems (CDNS - Free Report) typically outpaced expectations on its bottom line for Q4 after today’s close. Earnings of $1.88 per share surpassed the Zacks consensus by 6 cents, while $1.35 billion in revenues was exactly in-line with estimates. Again, however, guidance was weaker than analysts were looking for, and shares are down -5% in late trading. For more on CDNS’ earnings, click here.

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