New York, December 1, 2006--Banc of America Securities upgraded the home building sector to "neutral" from "underweight" Thursday and raised its price targets on major builders, citing its improving outlook for traffic, affordability and a moderation in new construction.
The brokerage said its monthly survey of real estate agents showed improved buyer traffic in 33 out of 39 markets in November relative to October, and added that it viewed traffic as the leading indicator of sales and pricing.
"We do not think the group is out of the woods yet because there remains a significant inventory problem, and pricing (margins) will probably continue suffer," the brokerage said in its research note.
The bank raised its price target on M.D.C. Holdings to $58 from $42, but maintained its "neutral" rating.
It also maintained "neutral" ratings, but raised its price targets on WCI Communities, Lennar, Hovnanian, DR Horton, Centex, Comstock and KB Home.
