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New Home Sales Jump in March: 5 Solid Stocks to Buy
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U.S. new single-family home sales bounced back in March after declining in February, the Commerce Department said on Apr 23. This once again shows the growing demand for new single-family homes despite skyrocketing lumber prices.
The homebuilding market was already on a high last year since the economy reopened and the trend continues. This at the same time shows the strength in the nation’s economy. Moreover, a low mortgage rate is helping the homebuilding industry and the scene is likely to stay so in the coming months too.
New Home Sales Soar
The Commerce Department said on Friday that new home sales jumped 20.7% month over month in March to a seasonally adjusted annual rate of 1.021 million units. New home sales unexpectedly declined in February by 16.2% to an eight-month low.
The jump in March also is the highest level since August 2006. Moreover, March sales were 66.8% higher on a year-over-year basis. The median price of a new home in March was $330,800, up from the year-ago price of $328,200.
New home sales in March were driven by greater demand in the South, where sales soared 40.2%to an annual rate of 694,000.
Housing Market on a High
The jump in March comes despite skyrocketing home prices. At the same time, lumber prices too have been pushing up the costs. That however, hasn’t dampened the spirit of buyers.
The industry has been on a high for quite some time now as high demand for new homes have seen acute shortage in supply. This has seen homebuilders making the most of the opportunity.
The pandemic saw many leave big cities and settling in smaller towns, spurring home sales. Moreover, the record-low mortgage rate is acting as a tailwind for the housing sector.
There were already fewer homes in comparison to the high demand before the pandemic, and now fewer homeowners are willing to list their homes for sale. This is further boosting home prices and the trend is likely to continue in the days to come.
Our Choices
A record-low mortgage rate coupled with soaring demand for single-family homes is likely to help the homebuilding market in the near term. This thus makes for an opportune time to invest in homebuilding stocks.
Toll Brothers Inc. (TOL - Free Report) builds single-family detached and attached home communities; master-planned luxury residential resort-style golf communities; and urban low, mid, and high-rise communities, principally on the land it develops and improves.
The company’s expected earnings growth rate for the next year is 56.2%. The Zacks Consensus Estimate for current-year earnings has improved 11.6% over the past 30 days. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KB Home (KBH - Free Report) is a well-known homebuilder in the United States. The company’s Homebuilding operations include building and designing homes that cater to first-time, move-up and active-adult homebuyers on acquired or developed lands.
The company’s expected earnings growth rate for next year is 81.5%. The Zacks Consensus Estimate for current-year earnings has improved 11.2% over the past 60 days. The company carries a Zacks Rank #2 (Buy).
Lennar Corporation (LEN - Free Report) is engaged in homebuilding and financial services in the United States. The company’s reportable segments consist of Homebuilding, Lennar Financial Services, Rialto and Lennar Multifamily.
The company’s expected earnings growth rate for the current year is 39.9%. The Zacks Consensus Estimate for current-year earnings has improved 23.9% over the past 60 days. The company has a Zacks Rank #2.
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 Denver, Phoenix, Maryland, Virginia, mid-Atlantic region, Las Vegas, Dallas and California metropolitan areas.
The company’s expected earnings growth rate for the current year is 34.6%. Its shares have gained 10.4% in the past one month. The company carries a Zacks Rank #2.
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 41.6%. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the past 60 days. The company has a Zacks Rank #2.
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New Home Sales Jump in March: 5 Solid Stocks to Buy
U.S. new single-family home sales bounced back in March after declining in February, the Commerce Department said on Apr 23. This once again shows the growing demand for new single-family homes despite skyrocketing lumber prices.
The homebuilding market was already on a high last year since the economy reopened and the trend continues. This at the same time shows the strength in the nation’s economy. Moreover, a low mortgage rate is helping the homebuilding industry and the scene is likely to stay so in the coming months too.
New Home Sales Soar
The Commerce Department said on Friday that new home sales jumped 20.7% month over month in March to a seasonally adjusted annual rate of 1.021 million units. New home sales unexpectedly declined in February by 16.2% to an eight-month low.
The jump in March also is the highest level since August 2006. Moreover, March sales were 66.8% higher on a year-over-year basis. The median price of a new home in March was $330,800, up from the year-ago price of $328,200.
New home sales in March were driven by greater demand in the South, where sales soared 40.2%to an annual rate of 694,000.
Housing Market on a High
The jump in March comes despite skyrocketing home prices. At the same time, lumber prices too have been pushing up the costs. That however, hasn’t dampened the spirit of buyers.
The industry has been on a high for quite some time now as high demand for new homes have seen acute shortage in supply. This has seen homebuilders making the most of the opportunity.
The pandemic saw many leave big cities and settling in smaller towns, spurring home sales. Moreover, the record-low mortgage rate is acting as a tailwind for the housing sector.
There were already fewer homes in comparison to the high demand before the pandemic, and now fewer homeowners are willing to list their homes for sale. This is further boosting home prices and the trend is likely to continue in the days to come.
Our Choices
A record-low mortgage rate coupled with soaring demand for single-family homes is likely to help the homebuilding market in the near term. This thus makes for an opportune time to invest in homebuilding stocks.
Toll Brothers Inc. (TOL - Free Report) builds single-family detached and attached home communities; master-planned luxury residential resort-style golf communities; and urban low, mid, and high-rise communities, principally on the land it develops and improves.
The company’s expected earnings growth rate for the next year is 56.2%. The Zacks Consensus Estimate for current-year earnings has improved 11.6% over the past 30 days. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
KB Home (KBH - Free Report) is a well-known homebuilder in the United States. The company’s Homebuilding operations include building and designing homes that cater to first-time, move-up and active-adult homebuyers on acquired or developed lands.
The company’s expected earnings growth rate for next year is 81.5%. The Zacks Consensus Estimate for current-year earnings has improved 11.2% over the past 60 days. The company carries a Zacks Rank #2 (Buy).
Lennar Corporation (LEN - Free Report) is engaged in homebuilding and financial services in the United States. The company’s reportable segments consist of Homebuilding, Lennar Financial Services, Rialto and Lennar Multifamily.
The company’s expected earnings growth rate for the current year is 39.9%. The Zacks Consensus Estimate for current-year earnings has improved 23.9% over the past 60 days. The company has a Zacks Rank #2.
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 Denver, Phoenix, Maryland, Virginia, mid-Atlantic region, Las Vegas, Dallas and California metropolitan areas.
The company’s expected earnings growth rate for the current year is 34.6%. Its shares have gained 10.4% in the past one month. The company carries a Zacks Rank #2.
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 41.6%. The Zacks Consensus Estimate for current-year earnings has improved 7.7% over the past 60 days. The company has a Zacks Rank #2.
Zacks' Top Picks to Cash in on Artificial Intelligence
In 2021, this world-changing technology is projected to generate $327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban says AI will create "the world's first trillionaires." Zacks' urgent special report reveals 3 AI picks investors need to know about today.
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