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The Zacks Analyst Blog Highlights: D.R. Horton, Lennar, Toll Brothers, KB Home and PulteGroup
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For Immediate Release
Chicago, IL – November 24, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include D.R. Horton Inc. (DHI - Free Report) ), Lennar Corporation (LEN - Free Report) ), Toll Brothers Inc. (TOL - Free Report) ), KB Home (KBH - Free Report) and PulteGroup, Inc. (PHM - Free Report) .
Here are highlights from Wednesday’s Analyst Blog:
Existing Home Sales Rise in October: Will the Rally Last?
Sales of previously owned homes increased in October for the second straight month, marking the best performance since June. However, low inventory is limiting the choice of prospective buyers and keeping price growth elevated.
Shares of prominent homebuilders such as D.R. Horton Inc., Lennar Corporation, Toll Brothers Inc., KB Home, PulteGroup, Inc., escalated yesterday after the release.
October Existing Home Sales Data
As revealed by the National Association of Realtors (NAR), existing-home sales increased 2% in October to a seasonally adjusted annual rate of 5.48 million units from 5.37 million in September. However, sales declined 0.9% from the year-ago level, marking the second consecutive year-over-year decline primarily due to shortage of supply. Moreover, the housing industry is yet to recover from the natural disaster that ravaged parts of Texas and Florida.
Meanwhile, October’s median sales price grew 5.5% from the comparable period a year ago to $247,000, marking the 68th straight month of year-over-year gains.
Again, inventory continues to slip, leaving less homes for future sales. The supply of existing homes decreased 3.2% from September and 10.4% from the year-ago period. It would take just 3.9 months to deplete the current supply of homes in the market, according to NAR. This is also the lowest October reading since the group began tracking the data in 1999.
Will the Momentum Continue?
The U.S. housing industry is gradually recovering from damages caused by the recent hurricanes in the South. Again, limited land availability is driving prices higher. Apart from concerns over chances of a series of interest rate hikes by the Federal Reserve, homebuilders continue to struggle with growing labor shortage, higher material costs and a constrained mortgage environment. These are restricting homebuilders to respond to the growing demand.
Besides, economists are of the opinion that a tax overhaul could add to the volatility in the market in the coming months. The measure would limit the mortgage-interest deduction on newly purchased homes at $500,000. This is quite a dramatic shift from the current cap of $1 million. The proposed capping of the mortgage-interest deduction could be damaging to pricier coastal markets that have been showing some strength in sales activity in recent times.
Despite the above-mentioned woes, new residential construction in the United States increased more than expected in October 2017, reinstating strength in the housing industry. Per the latest jointly released report by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, constructions for new homes increased 13.7% in October 2017 to 1.29 million units (seasonally adjusted annual rate) from the prior month. This also marks the biggest surge in 12 months as housing starts witnessed big gains in single-family homes and apartments.
Again, confidence among homebuilders rose in November to its highest reading in eight months to 70 and second-highest since the recession (July 2005), according to the Housing Market Index by the National Association of Home Builders ("NAHB") and Wells Fargo.
Bottom Line
The latest positive housing data undoubtedly reassures the industry’s strength courtesy of solid economic growth amid supply shortages and the ongoing recovery from hurricanes in Florida and Texas. Consistent job growth along with seemingly high homebuilders’ confidence is adding to the momentum.
Moreover, a good industry rank (Top 21% out of more than 256 industries) for homebuilding further supports the growth potential. In fact, in the last three months, the Zacks Homebuilding Industry has widely outperformed the broader market (S&P 500)
Major home builders such as KB Home, NVR Inc., TRI Pointe Group, Inc. and Toll Brothers Inc. are well poised on the bullish fundamentals of the housing market.
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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The Zacks Analyst Blog Highlights: D.R. Horton, Lennar, Toll Brothers, KB Home and PulteGroup
For Immediate Release
Chicago, IL – November 24, 2017 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include D.R. Horton Inc. (DHI - Free Report) ), Lennar Corporation (LEN - Free Report) ), Toll Brothers Inc. (TOL - Free Report) ), KB Home (KBH - Free Report) and PulteGroup, Inc. (PHM - Free Report) .
Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.
Here are highlights from Wednesday’s Analyst Blog:
Existing Home Sales Rise in October: Will the Rally Last?
Sales of previously owned homes increased in October for the second straight month, marking the best performance since June. However, low inventory is limiting the choice of prospective buyers and keeping price growth elevated.
Shares of prominent homebuilders such as D.R. Horton Inc., Lennar Corporation, Toll Brothers Inc., KB Home, PulteGroup, Inc., escalated yesterday after the release.
October Existing Home Sales Data
As revealed by the National Association of Realtors (NAR), existing-home sales increased 2% in October to a seasonally adjusted annual rate of 5.48 million units from 5.37 million in September. However, sales declined 0.9% from the year-ago level, marking the second consecutive year-over-year decline primarily due to shortage of supply. Moreover, the housing industry is yet to recover from the natural disaster that ravaged parts of Texas and Florida.
Meanwhile, October’s median sales price grew 5.5% from the comparable period a year ago to $247,000, marking the 68th straight month of year-over-year gains.
Again, inventory continues to slip, leaving less homes for future sales. The supply of existing homes decreased 3.2% from September and 10.4% from the year-ago period. It would take just 3.9 months to deplete the current supply of homes in the market, according to NAR. This is also the lowest October reading since the group began tracking the data in 1999.
Will the Momentum Continue?
The U.S. housing industry is gradually recovering from damages caused by the recent hurricanes in the South. Again, limited land availability is driving prices higher. Apart from concerns over chances of a series of interest rate hikes by the Federal Reserve, homebuilders continue to struggle with growing labor shortage, higher material costs and a constrained mortgage environment. These are restricting homebuilders to respond to the growing demand.
Besides, economists are of the opinion that a tax overhaul could add to the volatility in the market in the coming months. The measure would limit the mortgage-interest deduction on newly purchased homes at $500,000. This is quite a dramatic shift from the current cap of $1 million. The proposed capping of the mortgage-interest deduction could be damaging to pricier coastal markets that have been showing some strength in sales activity in recent times.
Despite the above-mentioned woes, new residential construction in the United States increased more than expected in October 2017, reinstating strength in the housing industry. Per the latest jointly released report by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, constructions for new homes increased 13.7% in October 2017 to 1.29 million units (seasonally adjusted annual rate) from the prior month. This also marks the biggest surge in 12 months as housing starts witnessed big gains in single-family homes and apartments.
Again, confidence among homebuilders rose in November to its highest reading in eight months to 70 and second-highest since the recession (July 2005), according to the Housing Market Index by the National Association of Home Builders ("NAHB") and Wells Fargo.
Bottom Line
The latest positive housing data undoubtedly reassures the industry’s strength courtesy of solid economic growth amid supply shortages and the ongoing recovery from hurricanes in Florida and Texas. Consistent job growth along with seemingly high homebuilders’ confidence is adding to the momentum.
Moreover, a good industry rank (Top 21% out of more than 256 industries) for homebuilding further supports the growth potential. In fact, in the last three months, the Zacks Homebuilding Industry has widely outperformed the broader market (S&P 500)
Major home builders such as KB Home, NVR Inc., TRI Pointe Group, Inc. and Toll Brothers Inc. are well poised on the bullish fundamentals of the housing market.
While, KB Home, NVR and TRI Pointe sport a Zacks Rank #1 (Strong Buy), Toll Brothers carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1 Stock of the Day pick for free.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year.See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.