The Zacks Analyst Blog Highlights: M/I Homes, Meritage Homes, KB Home, D.R. Horton And NVR
Zacks Investment Research | Nov 20, 2019 09:36PM ET
For Immediate Release
Chicago, IL – November 21, 2019 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: M/I Homes Inc. (NYSE:MHO) , Meritage Homes Corp. (NYSE:MTH) , KB Home (NYSE:KBH) , D.R. Horton Inc. (NYSE:DHI) and NVR Inc. (NYSE:NVR) .
Here are highlights from Wednesday’s Analyst Blog:
U.S. Building Permits Hit Highest Levels in 12 Years
The U.S. housing sector rebounded in October buoyed by a low mortgage rate and a fundamentally stable domestic economy, which is growing for the historically longest 11 years, albeit with some loss in pace. The housing starts marked the second-highest gain in October while building permits achieved the highest level in more than 12 years.
Turnaround in the housing sector is important since it generates more than 3% of the U.S. GDP. The Fed has reduced benchmark interest rate by 75 basis points, which helped the mortgage rate remain low. According to mortgage finance agency Freddie Mae, the 30-year fixed mortgage rate is currently hovering around 3.75%, well below 4.94% in November 2018.
Housing Starts Rebound
On Nov 19, the Department of Commerce reported that housing starts increased 3.8% in October to a seasonally adjusted annual rate of 1.314 million units. The figure was in line with the consensus estimate and higher than the September’s revised data of 1.266 million units. Year over year, housing starts grew 8.5% in October. Moreover, October was the second best month for housing starts so far in 2019.
Notably, the National Association of Home Builders confidence index hit a 20-month high in October. Region wise, housing starts in October increased 17.6% in the West, 8.7% in the Midwest and 0.7% in the South. However, it plunged 21.9% in the Northeast.
Building Permits Skyrocket
Building permits for privately owned housing units advanced 5% to a rate of 1.461 million units in October. The figure was higher than the September’s revised data of 1.391 million units as well as the consensus estimate of 1.39 million units. Year over year, housing starts jumped 14.1% in October. Notably, October’s data was the highest in 12 and half years.
Impressive building permits were driven by the single-family housing segment, which increased 3.2%, reflecting its highest level since August 2007. Single-family homebuilding increased 2% to a rate of 936,000 units in October, the highest in nine months. Notably, this segment accounts for the largest share of the housing market.
Our Top Picks
At this stage, it will be prudent to invest in homebuilding stocks with a favorable Zacks Rank. We narrowed down our search to five such stocks that rallied in the past six months and still hold momentum. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see Zacks Investment Research
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