Ask Matt: Are homebuilders in trouble?

Q: Are homebuilders in trouble?

A: Investors bracing for the wrecking ball to hit homebuilders' shares keep waiting. But the stocks keep working.

Lennar, a large homebuilder, is the latest example of a homebuilding stock that's been strong enough to withstand uncertainty. Shares are up more than 20% over the past year as the builder's profits and revenue have risen along with stronger new home demand. The company Monday reported 23% higher adjusted quarterly profit per share of 96 cents. That topped expectations by 20%. And it's not just a one-quarter phenomenon, either. Adjusted earnings are expected to jump 21% this fiscal year, says S&P Capital IQ.

Eventually the homebuilder stock party needs to wind down and analysts are starting to fear those days are approaching. Lennar shares are rated "hold" on average by analysts who rate the stock. There are signs of some housing market slowdown. Existing home sales fell 4.8% in August, according to a report Monday. Shares of Lennar skidded about 2% Monday following its earnings report.

Keep in mind, though, the drop in existing home sales comes following off a strong month of July. Homebuilders are also getting an unexpected lift from an accomodative Federal Reserve.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.