{"id":56349,"date":"2023-09-03T04:24:10","date_gmt":"2023-09-03T08:24:10","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/the-housing-market-is-facing-its-slow-season-home-builder-stocks-might-not-be\/"},"modified":"2023-09-03T04:24:13","modified_gmt":"2023-09-03T08:24:13","slug":"the-housing-market-is-facing-its-slow-season-home-builder-stocks-might-not-be","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=56349","title":{"rendered":"The Housing Market Is Facing Its Slow Season. Home Builder Stocks Might Not Be."},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000735004\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<p>        <!-- eventually when we know what this card will be we can change it and leave this one --><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<\/figure><\/div>\n<p>Home sales look set to end the typically-hot summer season on a muted note as mortgage rates hover above 7%. But the new home market\u2014and home builder stocks\u2014could just be getting started.\u00a0<\/p>\n<p>Data in recent weeks have painted a languid picture of housing market activity heading into the fall. Existing-home sales in July\u2014the most recent month for which National Association of Realtors data is available\u2014fell to a seasonally-adjusted annual rate of 4.07 million, the lowest such reading since January.\u00a0<\/p>\n<div class=\"paywall\">\n<p>Other data points offer little hope for significant improvement in the coming months. Pending home sales, a measure based on contract signings, gained in July for the second consecutive month, but remained well below year-ago levels, according to the National Association of Realtors.<\/p>\n<p>August data from the Mortgage Bankers Association, meanwhile, suggest that home purchase demand remained low overall last month. <\/p>\n<p>\u201cElevated mortgage rates and tight housing inventory continue to weigh on home buying activity,\u201d Joel Kan, the mortgage bankers group\u2019s deputy chief economist, said in a statement.\u00a0<\/p>\n<p>This year has been a difficult one to buy a house, particularly for consumers shopping for a previously owned home. Mortgage rates tracked by<br \/>\n        Freddie Mac<br \/>\n       have remained above 6% all year, rising as high as 7.23% last month, the measure\u2019s highest level in more than two decades. Home listings have remained in short supply\u2014a likely byproduct of the pandemic\u2019s earlier refinance boom, driven by low rates at the time\u2014helping send home prices higher.\u00a0<\/p>\n<p>Expect more of the same this fall, says Nicole Bachaud, a senior economist at<br \/>\n        Zillow<span>.<\/span>\n       <\/p>\n<p>\u201cWhile we\u2019re still seeing things move off the market quickly, there\u2019s not very many homes to move\u2014so we\u2019re going to see sales continuing to be low for the existing [homes] side,\u201d she says. The low inventory of previously owned homes for sale will also move prices higher: Zillow recently said it expects prices to rise 6.5% year-over-year by next July.\u00a0<\/p>\n<p>While the existing-homes market\u2014which generally comprises the bulk of all home sales\u2014remains challenged, it\u2019s a different story in new construction. Builders this year have benefited from the housing market\u2019s short supply, data suggest: New home sales, a government measure based on contract signings, increased in July to the highest seasonally-adjusted level since February 2022.\u00a0<\/p>\n<p>\u201cBuilders are still able to offer things like mortgage rate buy-downs and other incentives that really do tip the scales towards new construction,\u201d Bachaud said. \u201cWe are definitely going to see new construction sales staying fairly strong.\u201d<\/p>\n<p>August\u2019s rise in mortgage rates could cut further into existing-home demand. But there\u2019s little to suggest that builders\u2019 business has been buffeted by climbing rates, says Carl Reichardt, Jr., a home building analyst at BTIG.  <\/p>\n<p>\u201cThere\u2019s nothing from the public builders that they\u2019ve said publicly that makes me think that August is unusually weak,\u201d Reichardt says.<\/p>\n<p>The housing market typically slows down toward the end of the year, as temperatures drop in much of the U.S. and families prepare for the start of the school year and holiday season. But just because the market slows doesn\u2019t mean home building stocks do. These shares often perform well in the later part of the year as companies discuss their plans for 2024 and investors look ahead to the spring season, Reichardt says.<\/p>\n<p>Indeed, stocks related to home building, on average, have outperformed the broader market between the end of September and the end of January, according to a Dow Jones Market Data analysis of FactSet data since 2006. The<br \/>\n        SPDR S&amp;P Homebuilders ETF<br \/>\n       (ticker: XHB) has risen an average 6.3% between the end of September and the end of January, beating the broader<br \/>\n        S&amp;P 500<br \/>\n      \u2018s average 3.4% gain over the same period. <\/p>\n<p>Among the fund\u2019s top home builder holdings are<br \/>\n        PulteGroup<br \/>\n       (PHM) and<br \/>\n        Toll Brothers<br \/>\n       (TOL), whose shares have soared 82% and 68% so far in 2023.<\/p>\n<p>Write to Shaina Mishkin at shaina.mishkin@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/real-estate-housing-market-home-builder-stocks-506eca39?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Home sales look set to end the typically-hot summer season on a muted note as mortgage rates hover above 7%. But the new home market\u2014and home builder stocks\u2014could just be getting started.\u00a0 Data in recent weeks have painted a languid picture of housing market activity heading into the fall. Existing-home sales in July\u2014the most recent [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":56350,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-56349","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Housing Market Is Facing Its Slow Season. 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