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.
The darlings of 2014, the single-family housing investment and rental businesses, didn’t dominate like last year, but they still had a strong showing. After snagging four of the top five spots on the 2014 HW Fast50, two SFRs placed in the top five in 2015 and three made the top 50..
Bank loyalty is not a factor for borrowers in shopping for a mortgage loan. Borrowers tend to select a mortgage originator based on product, price and their expectation for a convenient transaction process. Read More