Housing Stocks Strong - BMHC misses

Defying all measures of reality, Housing stock prices rose today.
BMHC even missed, gave lower guidance, and still it went up
RYL +2.6%, BZH +2.6%, KBH +2.1%, PHM +1.9%, CTX +2.5%

BMHC profits fell 15%. Remove a one-time gain and profits actually dropped 30%
Sales were flat and they missed expectations by 5%+.

This is just the beginning of a deep slump, of dot.com proportions.
Lousiana Pacific reported a drop in profits: from $1.43 last year to $0.09 this year. "The current low pricing environment reflects weakened demand for building products across North America consistent with a fall-off in housing starts. The industry has entered a difficult market environment, and we see little short-term relief," the CEO said.

Ummm, timber?
This was the peak building season and they couldn't get rid of their lumber supplies without dropping prices in half.

With proof of a collapse in home construction, why aren't these companies seeing their stock prices drop? Because I think a lot of folks expected a much deeper drop-off. BMHC dropped off 'only' 30%.

As I've mentioned before, I expect BMHC to find some success in managing earnings. Their economy of scale gives them some pricing power over their vendors, especially now that demand is disappearing. They will milk that for better margins. But they can not fight the imminent collapse in sales.

The game is over. Stick a fork in them.