Investing.com – Stocks Toll Brothers Shares of (NYSE:NYSE:) were up 3.7% on Friday morning, with other housing stocks also posting gains as devastating wildfires continue to impact Los Angeles. Lennar Corp. (NYSE: NYSE:) was up 2.7%, PulteGroup (NYSE: NYSE:) was up 2%, DR Horton (NYSE: NYSE:) was up 2%, and KB Home (NYSE: NYSE:) was up 4 .7%. %.
The rise in shares came after firefighters reported some success in fighting fires that engulfed parts of Los Angeles County. Despite the progress, the return of strong winds on Friday could make the situation worse. The ongoing fires have killed 10 people and destroyed nearly 10,000 structures, and Los Angeles County Sheriff Robert Luna offered a grim assessment at a recent news conference.
As the region grapples with the devastation, the market reaction suggests increased demand in the housing sector due to the need to redevelop affected areas. The fires, which have been called the most destructive in Los Angeles history, have destroyed more than 34,000 acres, turning entire neighborhoods to ash.
The Kennett Fire near Calabasas is 35% contained and the Lydia Fire is 75% contained, while other fires continue to burn with varying degrees of control. The financial impact of the fires is expected to be significant, with private forecaster AccuWeather estimating damage and economic losses at between $135 billion and $150 billion.
The disaster prompted President Joe Biden to declare a major disaster and promise federal reimbursement for recovery efforts. The direct economic fallout, coupled with the possibility of a tough recovery and rising homeowners insurance costs, will likely weigh on the performance of housing stocks.
In addition to the immediate response to the bushfires, concerns have been raised about the allocation of government resources and the challenges faced by poorer households in dealing with insurance claims. These issues highlight the broader impacts of a disaster on society and the potential long-term recovery and recovery needs.
As the situation in Los Angeles continues to evolve, investors in housing stocks are closely monitoring developments and the potential for increased demand in the sector due to redevelopment efforts.
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