Bullish News Continues for Housing, Despite Higher Interest Rates. Here Are Key Stocks to Watch

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Bullish news continues for the U.S. housing sector, even with interest rates spiking to pre-coronavirus levels.

Home prices rose 10.4 percent in December, according to S&P CoreLogic Case-Shiller yesterday. It was the biggest in seven years, accelerating from November’s impressive 9.5 percent increase.

It followed another surprisingly robust report on Friday: Existing home sales hit an annualized pace of 6.69 million, the highest reading since 2005.

Those numbers highlight underlying positives in housing. The U.S. entered 2020 with a shortage of houses, and then experienced a spike in demand as the pandemic fueled demand for suburban homes. The result has been one of the strongest markets in U.S. history, with builder sentiment flying past levels from the 2005-2007 real-estate bubble.

Interest rates have jumped since those numbers were collected. That’s helped to drag down housing stocks in recent weeks, but several builders remain near long-term highs.

Here are some key names to watch:

CompanyMarket CapBusiness
DR Horton (DHI)$28 billionHomebuilder
Lennar (LEN)$26 billionHomebuilder
PulteHome (PHM)$12 billionHomebuilder
Lowe’s (LOW)$123 billionHome Improvement
Home Depot (HD)$288 billionHome Improvement
Lowe’s (LOW), daily chart, with 50-day moving average.
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