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Housing Market: Which Stocks to Buy (and Avoid) Right Now
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(0:45) - Residential Homebuilding: Single Family Market
(5:45) - Apartment Building On The Rise
(11:20) - The Fed Is Concerned With Increased Building: Should The Banks Be Worried?
(16:00) - Where To Invest In The Homebuilding Market?
(19:15) - Episode Roundup: Podcast@Zacks.com
Welcome to Episode #101 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Zacks Chief Equity Strategist and Editor of the Large Cap Trader, John Blank, to discuss what is going on in the housing sector.
Several home builders have already reported third quarter earnings.
Both KB Home (KBH - Free Report) and Lennar (LEN - Free Report) had solid reports, with both seeing an increase in their average price home. Orders and backlogs are also on the rise for both companies.
And while home prices are hitting new highs in many big cities, mortgage rates still remain near all-time lows and the job market is strong.
Should investors be jumping back into the homebuilders?
Millennial Renters
Since 2011, over 1.5 million new apartments have been built across the United States with thousands more still in the pipeline.
These buildings have mostly been “luxury” apartments with expanded amenities including spas, rock climbing walls and swimming pools, designed to appeal to young Millennials.
But some are now worried about excess supply and that a big apartment bust could be coming.
Multi-Family Lending: A Danger?
In early 2017, the Federal Reserve ordered the largest banks to set out how they would fare if rental apartment values fell by more than 35%.
The largest lenders of multifamily loans, at the end of 2016, were, no surprise, the largest banks like JP Morgan (JPM) and New York Community Bancorp (NYCB - Free Report) .
But many smaller banks like Dime Community BancsharesDCOM and Bank of the Ozarks have also gotten into the act and have large multifamily loan portfolios.
There is a real fear of an apartment bust. But is it exaggerated?
John explains what happens at the end of a lending cycle and whether or not we’re there right now in multifamily loans.
Housing Retailers Showing Strength
Maybe the way to “play” the resurgence of housing is through the retailers like Home Depot (HD - Free Report) and Restoration HardwareRH?
Home Depot has some of the strongest comparable store sales in the entire industry. Last quarter, it saw 6.6% same store sales in the United States.
When Millennials move into a new apartment, or buy a home, they will inevitably buy furniture, rugs, lamps and accessories.
What else should you know about the housing market and investing opportunities?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns RH in her personal portfolio.]
Eager to Learn How to Trade Options?
Have you always wanted to trade stock options but are unsure where to begin or what to look for?
Each week, Zacks’ Dave Bartosiak will bring you a detailed explanation of the trades “live” on YouTube.
Watch him go through the trade as he answers your questions in real time.
Become one of Dave’s minions. Join the Zacks Live Trader community today.
Image: Bigstock
Housing Market: Which Stocks to Buy (and Avoid) Right Now
Welcome to Episode #101 of the Zacks Market Edge Podcast.
Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.
In this episode, Tracey is joined by Zacks Chief Equity Strategist and Editor of the Large Cap Trader, John Blank, to discuss what is going on in the housing sector.
Several home builders have already reported third quarter earnings.
Both KB Home (KBH - Free Report) and Lennar (LEN - Free Report) had solid reports, with both seeing an increase in their average price home. Orders and backlogs are also on the rise for both companies.
And while home prices are hitting new highs in many big cities, mortgage rates still remain near all-time lows and the job market is strong.
Should investors be jumping back into the homebuilders?
Millennial Renters
Since 2011, over 1.5 million new apartments have been built across the United States with thousands more still in the pipeline.
These buildings have mostly been “luxury” apartments with expanded amenities including spas, rock climbing walls and swimming pools, designed to appeal to young Millennials.
But some are now worried about excess supply and that a big apartment bust could be coming.
Multi-Family Lending: A Danger?
In early 2017, the Federal Reserve ordered the largest banks to set out how they would fare if rental apartment values fell by more than 35%.
The largest lenders of multifamily loans, at the end of 2016, were, no surprise, the largest banks like JP Morgan (JPM) and New York Community Bancorp (NYCB - Free Report) .
But many smaller banks like Dime Community Bancshares DCOM and Bank of the Ozarks have also gotten into the act and have large multifamily loan portfolios.
There is a real fear of an apartment bust. But is it exaggerated?
John explains what happens at the end of a lending cycle and whether or not we’re there right now in multifamily loans.
Housing Retailers Showing Strength
Maybe the way to “play” the resurgence of housing is through the retailers like Home Depot (HD - Free Report) and Restoration Hardware RH?
Home Depot has some of the strongest comparable store sales in the entire industry. Last quarter, it saw 6.6% same store sales in the United States.
When Millennials move into a new apartment, or buy a home, they will inevitably buy furniture, rugs, lamps and accessories.
What else should you know about the housing market and investing opportunities?
Tune into this week’s podcast to find out.
[In full disclosure, Tracey owns RH in her personal portfolio.]
Eager to Learn How to Trade Options?
Have you always wanted to trade stock options but are unsure where to begin or what to look for?
Each week, Zacks’ Dave Bartosiak will bring you a detailed explanation of the trades “live” on YouTube.
Watch him go through the trade as he answers your questions in real time.
Become one of Dave’s minions. Join the Zacks Live Trader community today.
It’s now FREE. Click here for a trial >>>