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4 Top Gainers From the Pickup in Construction Spending
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Outlays on residential construction shot up once again in September, with demand for single-family homes remaining elevated, thanks to historically low interest rates. Per the latest data released by the U.S. Census Bureau, private construction spending increased 0.9% in September, to $1,074.9 billion, following August’s revised estimate of $1,065.6 billion.
Notably, private residential construction spending increased 2.8% during the month, to $610.9 billion, from the revised estimated August spending of $594.3 billion. Moreover, new single-family construction spending saw a rise of 5.7% in September, at $305.8 billion compared to August’s revised estimate of $289.3 billion.
A low interest rate environment has been instrumental in driving this uptick. The Fed has kept the benchmark lending rates at 0% to 0.25%. Meanwhile, per the historical weekly data by Freddie Mac, the average 30-year fixed-rate mortgage has remained below the 3% mark since Jul 30, with the latest rate being 2.8%, as of Oct 29.
The falling inventory of existing homes is another reason behind the drive in private residential construction spending as supply tried to catch up with demand. Per the data released by the National Association of Realtors (“NAR”), housing inventory at the end of September was at a record low, dipping 1.3% from August and 19.2% year over year to 1.47 million units. The decline comes as a consequence of a 9.4% increase in existing home-sales in September, marking the fourth successive month of gains. Substantiating the upswing in construction spending for new single-family homes, the NAR data also showed existing single-family homes sales rising 9.7% in September.
Moreover, the latest Community and Transportation Preference Survey conducted by NAR also highlighted the changing needs of people amid the pandemic. The survey indicated that the “importance of easy access to public transit and highways dropped 8% and 5%, respectively, from pre-pandemic levels”, suggesting that people are moving to suburban areas. Additionally, NAR president Vince Malta mentioned in the press release of the said survey that “substantial demand for walkability persists for Americans of all ages.”
Reflective of this increase in private construction spending, especially single-family construction spending, single-family housing starts has been on the rise too. Per the data jointly released by the Census Bureau and the Department of Housing and Urban Development, single-family housing starts increased 8.5% in September to 1,108,000 compared to the revised August estimate of 1,021,000.
Overall, U.S. construction spending rose 0.3% in September to $1,414.4 billion, sliding from the revised August estimate of a 0.8% increase to $1,410.4 billion. Nonetheless, spending rose for the fourth consecutive month. Year over year, construction spending till September increased 4.1% over the same period in 2019.
4 Top Gainers to Buy
Demand for single-family homes in the United States has remained high on the back of low interest rates. Private residential construction spending has also picked up in order to cater to rising demand, making it judicious to invest in homebuilding stocks that stand to benefit from this upswing going forward. Hence, we have selected four such stocks that carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Beazer Homes USA, Inc. (BZH - Free Report) constructs and sells both single-family and multi-family homes in the United States. The Zacks Consensus Estimate for its current-year earnings increased 8.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 20.5%. Its shares have already gained 36.8% in the July-September quarter.
Century Communities Inc. (CCS - Free Report) constructs, markets and sells single-family attached and detached homes, along with its subsidiaries, in the United States. The Zacks Consensus Estimate for its current-year earnings increased 17.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 25.9%.
Lennar Corporation (LEN - Free Report) constructs and sells single-family attached and detached homes in the United States, along with its subsidiaries. The Zacks Consensus Estimate for its current-year earnings increased 12.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 25.4%.
NVR, Inc. (NVR - Free Report) operates in the segments of mortgage banking and homebuilding, and is involved in the construction and selling of condominiums, townhomes and single-family detached homes in the United States. The Zacks Consensus Estimate for its current-year earnings increased 4.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 3.7%.
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.
Image: Bigstock
4 Top Gainers From the Pickup in Construction Spending
Outlays on residential construction shot up once again in September, with demand for single-family homes remaining elevated, thanks to historically low interest rates. Per the latest data released by the U.S. Census Bureau, private construction spending increased 0.9% in September, to $1,074.9 billion, following August’s revised estimate of $1,065.6 billion.
Notably, private residential construction spending increased 2.8% during the month, to $610.9 billion, from the revised estimated August spending of $594.3 billion. Moreover, new single-family construction spending saw a rise of 5.7% in September, at $305.8 billion compared to August’s revised estimate of $289.3 billion.
A low interest rate environment has been instrumental in driving this uptick. The Fed has kept the benchmark lending rates at 0% to 0.25%. Meanwhile, per the historical weekly data by Freddie Mac, the average 30-year fixed-rate mortgage has remained below the 3% mark since Jul 30, with the latest rate being 2.8%, as of Oct 29.
The falling inventory of existing homes is another reason behind the drive in private residential construction spending as supply tried to catch up with demand. Per the data released by the National Association of Realtors (“NAR”), housing inventory at the end of September was at a record low, dipping 1.3% from August and 19.2% year over year to 1.47 million units. The decline comes as a consequence of a 9.4% increase in existing home-sales in September, marking the fourth successive month of gains. Substantiating the upswing in construction spending for new single-family homes, the NAR data also showed existing single-family homes sales rising 9.7% in September.
Moreover, the latest Community and Transportation Preference Survey conducted by NAR also highlighted the changing needs of people amid the pandemic. The survey indicated that the “importance of easy access to public transit and highways dropped 8% and 5%, respectively, from pre-pandemic levels”, suggesting that people are moving to suburban areas. Additionally, NAR president Vince Malta mentioned in the press release of the said survey that “substantial demand for walkability persists for Americans of all ages.”
Reflective of this increase in private construction spending, especially single-family construction spending, single-family housing starts has been on the rise too. Per the data jointly released by the Census Bureau and the Department of Housing and Urban Development, single-family housing starts increased 8.5% in September to 1,108,000 compared to the revised August estimate of 1,021,000.
Overall, U.S. construction spending rose 0.3% in September to $1,414.4 billion, sliding from the revised August estimate of a 0.8% increase to $1,410.4 billion. Nonetheless, spending rose for the fourth consecutive month. Year over year, construction spending till September increased 4.1% over the same period in 2019.
4 Top Gainers to Buy
Demand for single-family homes in the United States has remained high on the back of low interest rates. Private residential construction spending has also picked up in order to cater to rising demand, making it judicious to invest in homebuilding stocks that stand to benefit from this upswing going forward. Hence, we have selected four such stocks that carry a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Beazer Homes USA, Inc. (BZH - Free Report) constructs and sells both single-family and multi-family homes in the United States. The Zacks Consensus Estimate for its current-year earnings increased 8.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 20.5%. Its shares have already gained 36.8% in the July-September quarter.
Century Communities Inc. (CCS - Free Report) constructs, markets and sells single-family attached and detached homes, along with its subsidiaries, in the United States. The Zacks Consensus Estimate for its current-year earnings increased 17.5% over the past 60 days. The company’s expected earnings growth rate for the current year is 25.9%.
Lennar Corporation (LEN - Free Report) constructs and sells single-family attached and detached homes in the United States, along with its subsidiaries. The Zacks Consensus Estimate for its current-year earnings increased 12.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 25.4%.
NVR, Inc. (NVR - Free Report) operates in the segments of mortgage banking and homebuilding, and is involved in the construction and selling of condominiums, townhomes and single-family detached homes in the United States. The Zacks Consensus Estimate for its current-year earnings increased 4.7% over the past 60 days. The company’s expected earnings growth rate for the current year is 3.7%.
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>>