How Home Builder Stocks Trade In A Seasonal Pattern

seasonal pattern home builders (Credit: Housing Market by free pictures of money on Flickr)

Introduction The U.S. housing market follows a seasonal pattern. The spring selling season represents the year’s peak of home sales. During this time, households try to settle into a new home before summer travel or well ahead of the Fall start to the next school year. The stocks of home builders also approximate a seasonal … Read more

Hanging in There – Housing Market Review

Housing Market Intro and Summary In “Marching Under the Shadow of Recession Fears – Housing Market Review” I spent some time discussing the impact of the Fed’s move to normalize monetary policy. That impact continues to ripple through the housing data. Yet, individual home builders are not yet reporting much impact from rising rates. They … Read more

Solid Housing Forecast from Freddie Mac Clears Way for Fed Rate Hikes

I doubted the ability of Freddie Mac to forecast the housing market once. Never again. In the immediate wake of the pandemic, Freddie Mac insisted that housing would recover rapidly. I was highly skeptical. Freddie Mac turned out to be too conservative! Fast forward two years and Freddie Mac has delivered a surprisingly solid housing … Read more

Leaning into the Headwinds of Higher Rates – The Housing Market Review

Housing Market Intro and Summary A hawkish Federal Reserve has changed the game for the housing market. At first, I thought the normalization in monetary policy would generate a “settling in” for the housing market. However with inventories tight, a scarcity in available labor, rising material costs, and a dysfunctional supply chain, higher rates may … Read more

A Nexus of Economic Recovery and Inflation – Housing Market Review

Housing Market Intro and Summary The home builder stock buying season started on a firm foundation. November delivered strong follow-through across a broad range of housing-related stocks even as the housing data settles into a period of normalization. Demand for new and existing homes is well off last year’s heated levels. Supply remains extremely tight … Read more

A Firming Foundation for the Home Builder Stock Buying Season – Housing Market Review

Housing Market Intro and Summary In the last Housing Market Review, I described the growing calm in the housing market data that contrast with the sell-off in home builder stocks. That sell-off worked in sync with the general stock market. The rebound in October also worked in parallel with the general stock market. As a … Read more

Home Builder Stocks Ignore the Calm in the Data – Housing Market Review

Housing Market Intro and Summary The housing market’s comfortable calm continued into September even as the stock prices of home builders raced downward. A general sell-off in the stock market ensnared housing-related stocks. Yet, the housing data reported in September showed little change from the prior month. While home builder stocks ignore the calm in … Read more

Tri Pointe Homes, Inc: Striding Into A Normalized Business Pace

Overall Assessment I am bullish on Tri Pointe Homes (TPH). The Tri Pointe Homes Q2 2021 earnings report delivered strong results, including records for home sales revenue, pre-tax profit, and the value of the backlog. Management reported familiar themes of strong demand and constrained inventories across demographics and geographies. Margins improved as the company once … Read more

KB Home Q2 2021 Earnings: Still Recovering from Disappointment

Overall Assessment I am neutral on KB Home (KBH). The KB Home Q2 2021 earnings report delivered strong results. Management was bullish, confident and even raised guidance. Yet, investors sold off the stock to the tune of a 6.7% loss. Clearly expectations were riding high. For example, KBH was one of the first home builders … Read more

How to Play Catch-Up With the Housing Market

The early 2000s built upon the 1990s momentum for extending home loans to as many people as possible. The drive culminated in the “ownership society” which incentivized the financial system to over-extend credit and fuel a housing bubble. That bubble collapsed spectacularly from 2008 to 2009. In the wake, builders became very wary about building … Read more