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Mortgage Application Volume Rises Y/Y: 5 Stocks to Buy
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Homebuyer demand is finally heating up. According to the Mortgage Bankers Association, total mortgage application volume rose last week from the previous week as more buyers rushed to buy new homes with states gradually lifting restrictions.
The news comes at the back of growing demand for new homes. New home sales surprisingly jumped in May, according to a monthly survey by John Burns Real Estate Consulting. This means both homebuilders and buyers have once again started showing confidence in the economy, signaling that the worst of the economic downturn is probably over.
Mortgage Application Volume Expands
According to the Mortgage Bankers Association, total mortgage application volume rose 4.1% from the previous week. The average 30-year fixed rate mortgage rose slightly to 3.2% from 3.19%.
However, some creditworthy borrowers are being offered rates below 3%, which helped push refinance application volume up 5% for the week and up 122% compared with the same week a year ago. Also, the refinance share of mortgage activity jumped to 64.8% of total applications from 64.2% the week earlier.
Home Sales Set to Grow
Sales of newly built homes jumped a whopping 55% in May according to a monthly survey by John Burns Real Estate Consulting. The jump is also the highest pace of sales growth since the height of the unprecedented housing boom in 2005.
Also, the United States witnessed an uptick in homebuilder sentiment in May. The National Association of Home Builders/Wells Fargo Housing Market Index climbed seven points to 37 in May after a record plunge in April.
Coronavirus resulted in record job losses in April, and a collapse in manufacturing output and retail sales. People backed out from buying homes as they feared blocking their money by investing in property. However U.S. consumer confidence and consumer spending improved in May, indicating that life is somewhat going back to normal and buyers who had postponed plans will once again go searching for new homes.
Our Choices
The rise in mortgage application volume coupled with a jump in new home sales is an indication that buyers are showing interest with the U.S. economy gradually reopening and people going back to work. In this opportune time to invest in homebuilding, we suggest four 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.
D.R. Horton, Inc. (DHI - Free Report) is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets.
The company’s expected earnings growth rate for the current year is 14.5%. The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the past 60 days.
Meritage Homes Corporation (MTH - Free Report) primarily engages in building and selling single-family homes for entry-level, first-time, move-up, luxury and active adult buyers in historically high-growth regions of the United States.
The company’s expected earnings growth rate for the current year is 3.1%. The Zacks Consensus Estimate for current-year earnings has improved 32.9% over the past 60 days.
Taylor Morrison Home Corporation (TMHC - Free Report) is a homebuilder and land developer engaged in building single-family detached and attached homes for first-time buyers.
The company’s expected earnings growth rate for next year is 71.4%. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days.
M.D.C. Holdings, Inc. engages in homebuilding and financial service businesses in the United States. It is engaged in the construction, sale and related financing of residential housing and the acquisition and development of land for use in the Denver, Phoenix, Maryland, Virginia, mid Atlantic region, Las Vegas, Dallas and California metropolitan areas.
The company’s expected earnings growth rate for next year is 14.4%. The Zacks Consensus Estimate for current-year earnings has improved 1% 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 next year is 21%. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the past 60 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Mortgage Application Volume Rises Y/Y: 5 Stocks to Buy
Homebuyer demand is finally heating up. According to the Mortgage Bankers Association, total mortgage application volume rose last week from the previous week as more buyers rushed to buy new homes with states gradually lifting restrictions.
The news comes at the back of growing demand for new homes. New home sales surprisingly jumped in May, according to a monthly survey by John Burns Real Estate Consulting. This means both homebuilders and buyers have once again started showing confidence in the economy, signaling that the worst of the economic downturn is probably over.
Mortgage Application Volume Expands
According to the Mortgage Bankers Association, total mortgage application volume rose 4.1% from the previous week. The average 30-year fixed rate mortgage rose slightly to 3.2% from 3.19%.
However, some creditworthy borrowers are being offered rates below 3%, which helped push refinance application volume up 5% for the week and up 122% compared with the same week a year ago. Also, the refinance share of mortgage activity jumped to 64.8% of total applications from 64.2% the week earlier.
Home Sales Set to Grow
Sales of newly built homes jumped a whopping 55% in May according to a monthly survey by John Burns Real Estate Consulting. The jump is also the highest pace of sales growth since the height of the unprecedented housing boom in 2005.
Also, the United States witnessed an uptick in homebuilder sentiment in May. The National Association of Home Builders/Wells Fargo Housing Market Index climbed seven points to 37 in May after a record plunge in April.
Coronavirus resulted in record job losses in April, and a collapse in manufacturing output and retail sales. People backed out from buying homes as they feared blocking their money by investing in property. However U.S. consumer confidence and consumer spending improved in May, indicating that life is somewhat going back to normal and buyers who had postponed plans will once again go searching for new homes.
Our Choices
The rise in mortgage application volume coupled with a jump in new home sales is an indication that buyers are showing interest with the U.S. economy gradually reopening and people going back to work. In this opportune time to invest in homebuilding, we suggest four 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.
D.R. Horton, Inc. (DHI - Free Report) is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets.
The company’s expected earnings growth rate for the current year is 14.5%. The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the past 60 days.
Meritage Homes Corporation (MTH - Free Report) primarily engages in building and selling single-family homes for entry-level, first-time, move-up, luxury and active adult buyers in historically high-growth regions of the United States.
The company’s expected earnings growth rate for the current year is 3.1%. The Zacks Consensus Estimate for current-year earnings has improved 32.9% over the past 60 days.
Taylor Morrison Home Corporation (TMHC - Free Report) is a homebuilder and land developer engaged in building single-family detached and attached homes for first-time buyers.
The company’s expected earnings growth rate for next year is 71.4%. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days.
M.D.C. Holdings, Inc. engages in homebuilding and financial service businesses in the United States. It is engaged in the construction, sale and related financing of residential housing and the acquisition and development of land for use in the Denver, Phoenix, Maryland, Virginia, mid Atlantic region, Las Vegas, Dallas and California metropolitan areas.
The company’s expected earnings growth rate for next year is 14.4%. The Zacks Consensus Estimate for current-year earnings has improved 1% 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 next year is 21%. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the past 60 days.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>