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There has been greater demand for new homes in 2001 with the Federal Reserve Board's lowering of interest rates in the US. Profits for the homebuilding industry are expected to be good, but there are reasons for caution, especially in California. These stocks are timely for 2001 with good near-term prospects.

Stocks of the homebuilding industry have performed well in 2000 and 2001 and are expected to remain timely due to favorable interest rates and other factors. The uneven balance for the supply and demand for new homes as an asset, but the slowing US economy may be a negative factor. These stocks are timely for 2001, but have little long-term appeal.

The price-earnings multiples for the homebuilding industry have been depressed in the 1st qtr of the year 2000 due to higher mortgage rates and other factors. Demand in the housing sector is also expected to slow in the second half of the year as well. Investors will find several good stocks in this sector for the the year ahead and the next three to five years.

Demand for new homes in the US has slowed during the 4th qtr of 1999 due to higher interest rates and possible further tightening by the Federal Reserve Board. However, strong earnings in the future are likely for homebuilders that provide high-quality, high priced homes, especially in California and the Sunbelt States. These stocks are timely, in spite of some problems, and are best suited for patient investors seeking capital gains through the years 2000 to 2004.

Most companies in Value Line's homebuilding industry group have shown strong earnings momentum. Their stock prices have moved lower, however, due to interest-rate worries and other concerns. Therefore, it is a good time to buy homebuilding stocks. Investors should focus on companies whose presence in growing markets is strong.

Mortgage availability, the strong US economy, and demand for housing have been beneficial for the construction industry in 1999, but industry stock prices have not reflected its earnings. This industry has historically been fragmented, which has both advantages and drawbacks, but the industry has been able to improve their approaches to the construction process. Most of these stocks are expected to do well in 1999 and for the next three to five years, as well.

Many stocks in the homebuilding industry have fallen by 20% in 1999, and many are at their yearly lows, even though the broader markets have had record highs. However, industry prospects are good for 1999 due to low interest rates and unemployment, along with high consumer confidence, and the operating efficiencies of many homebuilders have increased. The stocks in this industry are timely for the 2nd qtr of 1999 and several have good earnings prospects over the next two years.