Midday Report: Housing Stocks Rise on Bullish Real Estate Report

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Housing Starts LM Otero, AP
LM Otero, AP
The housing market has been leading the economic recovery, but have housing stocks hit the ceiling? They're jumping today after a very bullish report on housing starts: New construction projects last month topped the 1 million annual rate for the time since before the financial crisis began in 2008.

That's lifted shares of leading homebuilders by two to four percent today, adding to the huge gains over the past year.

KB Homes (KBH), Pulte (PHA) and Hovnanian (HOV) have all doubled in price over the past year. Lennar (LEN) is up 44 percent, D.R. Horton (DHI) is up 47 percent and Toll Brothers (TOL) 33 percent.

Those gains have prompted several other builders to go public this year. Taylor Morrison Home (TMHC), Tri Pointe, and William Lyon Home have all moved higher since their IPOs.

And even though there's plenty of optimism that housing will continue to lead the broader economic recovery, there's some concern that these stocks may slow down. Homebuilder stocks can no longer be considered cheap. So some analysts see alternate routes for investors looking to play the housing boom.

One way is through home-improvement retailers, which benefit from sales of both new and existing homes. Other plays include lumber, furniture and appliance companies.

It's also worth noting that today's report on home construction showed that starts of single-family homes actually declined in March. It was the more volatile multi-family sector that led the advance.

But there may be some stock market opportunities in REITs – real estate investment trusts – which focus on apartments. Among the biggest ones are Post Properties, Essex Property Trust and Associated Estates.

They make money from collecting monthly rents. And these stocks generally trade below the value of the properties they own.

Even some builders known for single-family homes are moving into the multi-family segment. Lennar announced in January that it plans to enter the apartment rental market.

Apartment rents have been rising for the past few years, and apartment vacancies are still at or near their lowest levels since 2001.

–Produced by Drew Trachtenberg

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Old-School Money Tricks That Still Work
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Midday Report: Housing Stocks Rise on Bullish Real Estate Report

With the various incentives to use credit and debit cards, cash can often seem like an afterthought. After all, obtaining, tracking, and toting it can seem more hassle than it's worth. But if credit-card swiping is turning into mindless spending with month-end statement shock, it might be time to switch from plastic back to paper.

A once-weekly withdrawal from a no-fee ATM can help keep spending on everything from incidentals to luxury items in check. Want to take it up a notch? Try budgeting and paying cash for purchases larger than the daily latte: groceries, gas, mass transit tickets, or an evening out.

Bank of America offers its customers the chance to Keep the Change. The premise is simple. For every purchase a customer makes with his or her debit card, Bank of America will round up to the nearest dollar, and deposit the difference into your savings account. The bank will even match the difference for the first three months, up to $250. The catch? B of A charges a $12 monthly maintenance fee for customers who don't use direct deposit or maintain a $1,500 minimum balance.

The old-school alternative? A mason jar and a daily ritual of emptying pockets and purses of any loose change left over after paying for items with cash.

There's something inherently charming about the old Holiday Club and Vacation Club accounts. They call to mind days when every $5 received in a birthday card was squirreled away; when banks still gave out toasters, and lined their counters with jars of lollipops.

It might sound quaint, but the discipline works. Socking away a few dollars a week over the course of several months to help fund a vacation or holiday shopping adds up. The cash out at the end of the term is like winning the lottery -- one lump sum comprised of tiny, barely noticeable amounts throughout the year.

Previous generations knew their banker by name, knew his or her children's names; they swapped stories, were part of the same community. While it's temping and convenient to complete most banking transactions online or rush in and out of a branch when needed, what's lost is a personal connection that email alerts and social-media posts simply can't replace.

There are tangible benefits to getting to know local branch staff. Having a face-to-face connection with bank staff can be helpful in resolving charge disputes, being kept abreast of rate changes, and getting information on specially tailored products.

Before the days of the large international bank, most people had their financial needs met at the corner savings and loan. If big banking has lost its appeal, seek out smaller, local banks, many of which aren't publicly traded, or credit unions, which are not-for-profit. The difference between these two types of banks and large, publicly traded ones is that banks that don't have to appease shareholders can focus on its customers first.

According to the Independent Community Bankers of America, local banks focus on "personal service, local credit decisions and ownership, and reinvestment in the community." And according to the Credit Union National Association, credit unions exist to provide financial literacy for their members, serve the needs of their members regardless of means, and offer lower rates than traditional large banking models.

While no one would recommend stashing savings under a mattress or issuing I.O.U.s for groceries, adopting some old-fashioned tactics for financial management might be just the ticket to thriving in the modern world.
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