3 Top Homebuilders With Solid Growth To Buy Now
Zacks Investment Research | Sep 14, 2017 09:55PM ET
The U.S. homebuilding industry has made a steady recovery from the economic slump in 2008, buoyed by healthy demand-supply balance, historically low mortgage rates, steady job and wage growth, and easy availability of loans, to name a few. The overall fundamentals of the housing market have been encouraging through 2016 and are expected to improve throughout 2017.
However, shortage of buildable lots, skilled labor and capital are limiting home production, thereby lowering the inventory of homes, both new and existing. Reduced inventory means fewer options for buyers, which in turn affects the overall affordability of homes. Per the National Association of Realtors or NAR, total housing inventory at the end of July declined 1% to 1.9 million homes available for sale. It is also 9% lower than the year-ago figure, falling straight for the 26th consecutive months.
But again, strong demand coupled with low inventory levels is driving home prices thereby boosting revenues for homebuilders. The median existing-home price for all housing types in July rose 6.2% from the year-ago level, marking the 65th straight month of year-over-year gains. We believe prices will continue to scale higher as demand for homes is like to grow on high consumer confidence and low unemployment.
Good Times Ahead for the Industry?
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