Shiv Naimpally Posted December 17, 2022 Share Posted December 17, 2022 During one of the recent live trading rooms, we looked at home builders PHM and LEN and then the ETFs ITB and XHB and someone asked the question "Why are we looking at home builders when rates are rising?" While interest rates are something to consider, the main thing Dean looks at is the chart and what it is saying. Anything else, such as interest rates, earnings, etc. are all part of the back story. Also, interest rates are not that big a deal for home builders because many offer their own financing (when my wife and I bought a Pulte home in Dallas many years ago, Pulte was offering their own financing) or they partner with a mortgage company and pay down the interest, on a sliding scale, for several years (typically 5 years) so that home buyers can get a lower rate now. https://www.investors.com/stock-lists/ibd-50/inside-the-50-homebuilder-stocks-shine-despite-rising-mortgage-rates/ https://www.businessinsider.com/homebuilders-turn-to-mortgage-rate-buydowns-as-affordability-sours-2022-12 1 Quote Link to comment
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