Framing the Homebuilders
#142: Ten Homebuilding Stocks: Six Winners and Four Losers
Homebuilders at inflection.
Since 2020, the housing market has been one of the toughest to navigate. Soaring prices in the stay-at-home economy were quickly tested by rate hikes. But despite calls for a housing bust, the pullback in 2022 proved temporary and demand proved sturdy.
Amid a dearth of existing home supply in the past three years, new construction has filled the void between homebuyers and a resale market frozen by the mortgage “lock-in” effect. For homebuilders, this backdrop has led to major profits and market gains.
But the sentiment is shifting. Over the past two months, homebuilding stocks have puked up much of the prior year’s gains. New completed housing inventory is piling up as new home prices continue a wayward drift, leaving us to question whether we’ve seen this movie before.
Rather than speculate, let’s take a hard look at the nation’s biggest homebuilders and find out. First, we take a look at the industry in aggregate, then sift the wheat from the chaff, picking six winners and four losers. The findings were surprising.