Despite home improvement retailer shares rising to a record high, homebuilder stocks have fallen more than 20% on signs that some investors are too pessimistic and that high mortgage rates could derail new construction.
Homebuilders are driving into their peak season, with more than 75% of annual homebuilder returns historically generated in the November-to-January time frame due to growth in demand in advance of the upcoming spring selling season.
A flurry of economic data released Thursday pushed homebuilder stocks higher, while other mortgage firms suffered from the pains of rising rates and uncertainty about the Fed's commitment to quantitative easing.
It doesn't look good for homebuilders share prices in the near term. Recent action in the iShares Dow Jones US Home Construction fund indicates weakness in the sector and these stocks are starting to break down.
Melvin Luther Watt quietly slid into his office as the first appointed director of the Federal Housing Finance Agency. It was the end of last year, in mid-December. Christmas was coming and the markets were in the middle of the harshest winter in years. As he took over the office of Acting Director Ed DeMarco — himself the unassuming lightning rod for the nation’s housing policy — Watt gave no indication of what he intended to do with his new position; arguably the most powerful job in mortgage finance..
Crowdfunding has swept through large verticals of consumer finance, including student loans and credit card debt. And so, naturally, in a market of rising property values, the real estate market is the latest frontier for crowd-based financing. Read More
Like oxygen, warehouse lending is one of the mortgage industry’s essential life-supporting elements. And fortunately, the warehouse segment is in much better health today than it was six years ago, as we are back up to around 70 warehouse lenders at my last count. Read More