Latest news with #homebuilder
Yahoo
4 days ago
- Business
- Yahoo
Builder Confidence Declines: Are Homebuilder ETFs in Trouble?
Homebuilder confidence has plummeted to an 18-month low, stirring concerns about the health of the housing market and raising red flags for investors in homebuilder-related ETFs. As such, iShares U.S. Home Construction ETF ITB, SPDR S&P Homebuilders ETF XHB, Invesco Building & Construction ETF PKB and Hoya Capital Housing ETF HOMZ are likely to feel the to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index, builder confidence fell in June to 32, its lowest level since December 2022. Gauges of traffic of prospective buyers and expected sales over the next six months are both at the weakest point in more than a year, per NAHB data. Current sales conditions dropped to the lowest level since mortgage rates, concerns over the broader U.S. economy and potential tariff-driven cost increases have discouraged both builders and buyers. In fact, the NAHB estimates that new tariffs, anticipated under President Trump's trade policies, could increase the cost of constructing a home by nearly $11,000 (read: Where's the Housing Market Heading? ETFs to Consider).Adding to the pressure is increased competition from the resale market, as the inventory of existing homes is increasing. Builders are turning to discounting and incentives, with 37% reporting price cuts in June — the highest since NAHB began tracking the figure monthly in the housing sector is facing other headwinds, such as an ongoing shortage of labor and buildable lots as well as elevated building material prices. iShares U.S. Home Construction ETF (ITB) iShares U.S. Home Construction ETF provides exposure to U.S. companies that manufacture residential homes by tracking the Dow Jones U.S. Select Home Construction Index. With AUM of $2.1 billion, iShares U.S. Home Construction ETF holds a basket of 47 stocks with a heavy concentration on the top two firms. The product charges 39 bps in annual fees and trades in a heavy volume of around 3 million shares a day on average (read: Sector ETFs Set to Gain as Inflation Cools in May).SPDR S&P Homebuilders ETF (XHB) SPDR S&P Homebuilders ETF provides exposure to homebuilders with a well-diversified exposure across building products, home furnishing, home improvement retail, home furnishing retail, and household appliances. It tracks the S&P Homebuilders Select Industry Index, holding 35 stocks in its basket. SPDR S&P Homebuilders ETF is the most popular option in the homebuilding space, with AUM of $1.2 billion and an average daily volume of 2.4 million shares. The product charges 35 bps in annual Building & Construction ETF (PKB) Invesco Building & Construction ETF follows the Dynamic Building & Construction Intellidex Index, holding 31 well-diversified stocks in its basket, with none accounting for more than 5.2% of the assets. Invesco Building & Construction ETF has amassed assets worth $216.7 million and sees a lower volume of roughly 13,000 shares per day on average. The expense ratio comes in at 0.57%.Hoya Capital Housing ETF (HOMZ)Hoya Capital Housing ETF invests in 100 domestic companies involved across the U.S. housing industry, including rental operators, homebuilders, home improvement companies and real estate services and technology firms, by tracking the Hoya Capital Housing 100 Index. Hoya Capital Housing ETF has accumulated $33.1 million in its asset base and charges 30 bps in annual fees. The product trades in an average daily volume of 2,000 shares. With sentiment nearing pandemic lows and affordability issues, homebuilder ETFs will remain under pressure. The above-mentioned ETFs have a Zacks ETF Rank #4 (Sell), indicating more pain ahead. However, investors shouldn't completely write off the homebuilder ETFs from their portfolio because they offer exposure to various firms, suggesting that the space can easily counter shocks from some of the industry's biggest components. Further, long-term housing demand may remain robust due to demographics and low supply. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SPDR S&P Homebuilders ETF (XHB): ETF Research Reports iShares U.S. Home Construction ETF (ITB): ETF Research Reports Invesco Building & Construction ETF (PKB): ETF Research Reports Hoya Capital Housing ETF (HOMZ): ETF Research Reports This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Homebuilder sentiment hits 2022 low: How can it rebound?
Homebuilder sentiment hits its lowest level since 2022, according to survey data from the National Association of Home Builders (NAHB). Walton Global executive vice president of capital markets, Katie Hubbard, joins Wealth with Allie Canal to take a closer look at the decline in homebuilder sentiment and what could catalyze a rebound. To watch more expert insights and analysis on the latest market action, check out more Wealth here.
Yahoo
5 days ago
- Business
- Yahoo
US homebuilder sentiment skids to 2-1/2-year low, NAHB says
(Reuters) -A gauge of U.S. homebuilder sentiment slid unexpectedly to its lowest level in two and a half years in June, with more than a third of residential construction firms cutting prices to lure buyers sidelined by high mortgage rates and economic uncertainty due to President Donald Trump's tariffs. The National Association of Home Builders/Wells Fargo Housing Market Index fell to 32, the lowest reading since December 2022, from 34 in May. Economists polled by Reuters had expected the sentiment score to improve to 36. Measures of current sales conditions, future sales expectations and buyer foot traffic all fell. On a regional basis, the Northeast posted a small rise while the South, Midwest and West all declined. "Rising inventory levels and prospective home buyers who are on hold waiting for affordability conditions to improve are resulting in weakening price growth in most markets and generating price declines for resales in a growing number of markets," Robert Dietz, NAHB's chief economist, said in a statement. "Given current market conditions, NAHB is forecasting a decline in single-family starts for 2025." Mortgage rates remain elevated. The average rate on the most popular home loan, the 30-year fixed-rate mortgage, was 6.84% last week, according to home finance firm Freddie Mac, squarely in the middle of the 6.60% to 7.04% range over the past six months. "Buyers are increasingly moving to the sidelines due to elevated mortgage rates and tariff and economic uncertainty," said NAHB Chairman Buddy Hughes, a home builder and developer based in Lexington, North Carolina. "To help address affordability concerns and bring hesitant buyers off the fence, a growing number of builders are moving to cut prices." The survey showed 37% of builders were cutting prices in June, the highest percentage since NAHB began tracking the metric on a monthly basis in 2022. That figure was up from 34% in May and 29% in April, while the average price cut held steady at 5%. The use of any kind of incentive ticked up a point to 62%. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Bloomberg
5 days ago
- Business
- Bloomberg
Stock Movers: Lennar, VERV, T-Mobile
On this episode of Stock Movers: - Lennar (LEN) is edging higher after a miss on the homebuilder's new orders outlook was tempered by better-than-expected gross margins, which RBC Capital Markets said should reassure investors. Analysts including Mike Dahl say Lennar's results came in better than feared on gross margin percentage with orders modestly missing, while the guide for a flat quarter-on-quarter gross margin percentage also surprised on the upside. Lennar's second-quarter adjusted earning per share missed consensus estimates with higher selling, general, and administrative expenses and lower average selling price, but gross margins in-line, write analysts including Matthew Bouley of Barclays. - Sunrun (RUN) shares are sinking in the premarket. It comes as KeyBanc Capital Markets analyst Sophie Karp cut the recommendation on Sunrun Inc. to underweight from sector weight. Investors who followed Karp's recommendation received a 0% return in the past year, compared with a negative 27% return on the shares. - Verve Therapeutics (VERV) is soaring following a Financial Times report that Eli Lilly is reportedly in advanced talks to buy the gene-editing startup for as much as $1.3 billion. Eli Lilly (LLY) is lower on M&A news. Eli Lilly would pay almost $1 billion upfront and another $300 million based on Verve reaching clinical milestones, according to FT. - T-Mobile (TMUS) is sliding this morning after a report that SoftBank raised around $4.8 billion through a sale of 21.5 million T-Mobile US Inc. shares at $224 each. The deal represents a 3% discount to T-Mobile US's Monday closing price of $230.99 per share and is the biggest US share sale since February.
Yahoo
5 days ago
- Business
- Yahoo
Lennar Tops Revenue Estimates, Profit Falls Short as Discounts Fuel Home Sales
Shares of Lennar Corp. (LEN) rose in premarket trading Tuesday, a day after the homebuilder posted a mixed second-quarter report, with revenue topping analysts' expectations but profit, new orders, and average sale price falling short. After the bell Monday, the Miami-based firm reported earnings per share of $1.81 on revenue that decreased more than 4% year-over-year to $8.38 billion. Analysts surveyed by Visible Alpha had expected $1.96 and $8.29 billion, respectively. Lennar generated 22,601 new orders and 20,131 home deliveries with an average sales price of $389,000, while analysts were looking for 22,934, 20,019, and $400,690, respectively. Last quarter, Lennar guided for 22,500 to 23,500 new orders and 19,500 to 20,500 deliveries with an average sales price of $390,000 to $400,000. "While we continue to see softness in the housing market due to affordability challenges and a decline in consumer confidence, we adhered to our strategy of driving starts, sales, and closings in order to build long-term efficiencies in our business," Lennar co-CEO Stuart Miller said. For the third quarter, Lennar expects 22,000 to 23,000 new orders and an identical range for deliveries, with an average sales price of $380,000 to $385,000. Analysts were calling for 22,542 new orders and 23,645 deliveries with an average sales price of $398,260. Lennar shares, which entered Tuesday down 17% this year, advanced 2% before the opening bell. Read the original article on Investopedia Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
