The U.S. homebuilding market has been on a tear since the economy started reopening. While most major industries have been hit hard by the pandemic, the homebuilding industry has been swimming against the tide. An increasing number of Americans, who had postponed their plans of buying a home earlier this year due to the coronavirus-induced lockdown, are now flocking to the market to buy homes.
This has seen mortgage applications rising over the weeks. While the Thanksgiving week and the holiday season, in particular, aren’t traditionally the time to buy homes, this year has been different. According to the Mortgage Bankers Association, mortgage applications jumped substantially last week from the previous week, once again proving that more people are rushing to buy homes.
Mortgage Application Jumps Unexpectedly
According to Mortgage Bankers Association’s (MBA) seasonally adjusted Purchase Index, mortgage applications for home purchase increased 9% last week from the week earlier. Moreover, purchase applications for homes were 28% higher than the same period last year.
Higher home prices due to growing demand also saw average loan amount hitting $370,000 last week, the highest since MBA started the survey in 1990. One of the major reasons for more people rushing to buy homes is the low mortgage rate. At the same time, it is also pushing up the prices of new homes.
Demand for Homes, Other Factors Helping Homebuilding Market
Thanksgiving isn’t traditionally the most popular time to buy homes. However, the homebuilding market has been doing well all through the summer season, especially after the economy started reopening. Be it new homes or existing homes, sales have been rising since then. Last week, the Commerce Department said that sales of new homes jumped 41.5% on a year-over-year basis in October.
According to a report from the Federal Housing Finance Agency released on Nov 24, U.S. home prices jumped a record 3.1% in the third quarter from the prior quarter. This marks a 7.8% rise from the year-ago levels.
Also, homebuilder confidence is on a historic high. According to the National Association of Home Builders’ Wells Fargo Housing Market Index, homebuilder confidence for single-family homes hit a record high for the third consecutive month in November, with the index reading 90. The index read 71 in the year-earlier period.
Our Choices
Record low mortgage rate is spurring demand and helping to boost home prices. This has been the reason behind the jump in mortgage applications also. Moreover, the jump in new and existing homes sales indicates that buyers are showing confidence in the economy. In this opportune time to invest in homebuilding, we suggest five stocks with a Zacks Rank #1 (Strong Buy) that are likely to gain ahead. You can see the complete list of today’s Zacks #1 Rank stocks here.
Beazer Homes USA, Inc. (BZH - Free Report) designs, builds and sells single-family homes. The company designs homes to appeal primarily to entry-level and first move-up home buyers.
The company’s expected earnings growth rate for the current year is 2.1%. The Zacks Consensus Estimate for current-year earnings has improved 20.6% over the past 60 days.
Century Communities, Inc. (CCS - Free Report) is a home building and construction company. Its activities comprise land acquisition, development, and entitlements; and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects.
The company’s expected earnings growth rate for the current year is 25.9%. The Zacks Consensus Estimate for current-year earnings has improved 17.5% over the past 60 days.
NVR, Inc. (NVR - Free Report) is engaged in the construction and sale of single-family detached homes, townhomes and condominium buildings, all of which are primarily constructed on a pre-sold basis.
The company’s expected earnings growth rate for the current year is 3.7%. The Zacks Consensus Estimate for current-year earnings has improved 4.7% over the past 60 days.
TRI Pointe Group, Inc. (TPH - Free Report) is involved in the design, construction and sale of single-family homes. The company's operating portfolio includes Maracay Homes in Arizona; Pardee Homes in California and Nevada; Quadrant Homes in Washington; Trendmaker Homes in Texas; TRI Pointe Homes in California and Colorado; and Winchester Homes in Maryland and Virginia.
The company’s expected earnings growth rate for the current year is 27.9%. The Zacks Consensus Estimate for current-year earnings has improved 22.1% over the past 60 days.
PulteGroup, Inc. (PHM - Free Report) engages in homebuilding and financial services businesses, primarily in the United States. The company conducts operations through two primary business segments — Homebuilding and Financial Services.
The company’s expected earnings growth rate for the current year is 41.3%. The Zacks Consensus Estimate for current-year earnings has improved 15.5% over the past 60 days.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
The U.S. homebuilding market has been on a tear since the economy started reopening. While most major industries have been hit hard by the pandemic, the homebuilding industry has been swimming against the tide. An increasing number of Americans, who had postponed their plans of buying a home earlier this year due to the coronavirus-induced lockdown, are now flocking to the market to buy homes.
This has seen mortgage applications rising over the weeks. While the Thanksgiving week and the holiday season, in particular, aren’t traditionally the time to buy homes, this year has been different. According to the Mortgage Bankers Association, mortgage applications jumped substantially last week from the previous week, once again proving that more people are rushing to buy homes.
Mortgage Application Jumps Unexpectedly
According to Mortgage Bankers Association’s (MBA) seasonally adjusted Purchase Index, mortgage applications for home purchase increased 9% last week from the week earlier. Moreover, purchase applications for homes were 28% higher than the same period last year.
Higher home prices due to growing demand also saw average loan amount hitting $370,000 last week, the highest since MBA started the survey in 1990. One of the major reasons for more people rushing to buy homes is the low mortgage rate. At the same time, it is also pushing up the prices of new homes.
Demand for Homes, Other Factors Helping Homebuilding Market
Thanksgiving isn’t traditionally the most popular time to buy homes. However, the homebuilding market has been doing well all through the summer season, especially after the economy started reopening. Be it new homes or existing homes, sales have been rising since then. Last week, the Commerce Department said that sales of new homes jumped 41.5% on a year-over-year basis in October.
According to a report from the Federal Housing Finance Agency released on Nov 24, U.S. home prices jumped a record 3.1% in the third quarter from the prior quarter. This marks a 7.8% rise from the year-ago levels.
Also, homebuilder confidence is on a historic high. According to the National Association of Home Builders’ Wells Fargo Housing Market Index, homebuilder confidence for single-family homes hit a record high for the third consecutive month in November, with the index reading 90. The index read 71 in the year-earlier period.
Our Choices
Record low mortgage rate is spurring demand and helping to boost home prices. This has been the reason behind the jump in mortgage applications also. Moreover, the jump in new and existing homes sales indicates that buyers are showing confidence in the economy. In this opportune time to invest in homebuilding, we suggest five stocks with a Zacks Rank #1 (Strong Buy) that are likely to gain ahead. You can see the complete list of today’s Zacks #1 Rank stocks here.
Beazer Homes USA, Inc. (BZH - Free Report) designs, builds and sells single-family homes. The company designs homes to appeal primarily to entry-level and first move-up home buyers.
The company’s expected earnings growth rate for the current year is 2.1%. The Zacks Consensus Estimate for current-year earnings has improved 20.6% over the past 60 days.
Century Communities, Inc. (CCS - Free Report) is a home building and construction company. Its activities comprise land acquisition, development, and entitlements; and the acquisition, development, construction, marketing, and sale of various single-family detached and attached residential home projects.
The company’s expected earnings growth rate for the current year is 25.9%. The Zacks Consensus Estimate for current-year earnings has improved 17.5% over the past 60 days.
NVR, Inc. (NVR - Free Report) is engaged in the construction and sale of single-family detached homes, townhomes and condominium buildings, all of which are primarily constructed on a pre-sold basis.
The company’s expected earnings growth rate for the current year is 3.7%. The Zacks Consensus Estimate for current-year earnings has improved 4.7% over the past 60 days.
TRI Pointe Group, Inc. (TPH - Free Report) is involved in the design, construction and sale of single-family homes. The company's operating portfolio includes Maracay Homes in Arizona; Pardee Homes in California and Nevada; Quadrant Homes in Washington; Trendmaker Homes in Texas; TRI Pointe Homes in California and Colorado; and Winchester Homes in Maryland and Virginia.
The company’s expected earnings growth rate for the current year is 27.9%. The Zacks Consensus Estimate for current-year earnings has improved 22.1% over the past 60 days.
PulteGroup, Inc. (PHM - Free Report) engages in homebuilding and financial services businesses, primarily in the United States. The company conducts operations through two primary business segments — Homebuilding and Financial Services.
The company’s expected earnings growth rate for the current year is 41.3%. The Zacks Consensus Estimate for current-year earnings has improved 15.5% over the past 60 days.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Get the latest research report on PHM - FREE
Get the latest research report on BZH - FREE
Get the latest research report on CCS - FREE
Get the latest research report on NVR - FREE
Get the latest research report on TPH - FREE