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5 Homebuilder Stocks to Buy as US Housing Starts Surge in July
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The U.S. housing sector is emerging as one of the bright spotsof the economy that has been battered by the coronavirus pandemic. In July, America’s homebuilders accelerated the most in nearly four years, surging 22.6% and recording the biggest gain since October 2016.
Per the U.S. Census Bureau and the U.S. Department of Housing and Urban Development’s joint report on Aug 18, U.S. homebuilders began the construction (housing starts) of 1,496,000 homes in July. The figure is above the June’s revised figure of 1,220,000 and beats the consensus estimate of 1,241,000 units.
The report also states, the largest increase in homebuilding has been witnessed in the Northeast region, scaling up 35% from June. Housing starts in the South jumped 33% from the month before and the Midwest and West registered around 6% increase each in July. Additionally, multi-family projects of five units or more surged nearly 57%, marking the largest increase since October 2016. However, single-family construction increased just 8.2% last month.
The same report also stated that building permits in July rose 18.8% to a seasonally adjusted annual rate of 1,495,000, surpassing the consensus estimate of 1,333,000 and June’s revised figure of 1,258,000 units. Building permits issuanceoffers a gauge of residential construction activity in the upcoming month.
The report indicates that July’s construction pace was the fastest since February this year. The coronavirus outbreak had halted the record-long expansion of the U.S. economy, forcing people to stay indoors and shut down businesses. July’s surge now puts housing starts just 4.5% below February’s pace of 1,567,000units.
Additionally, perthe National Association of Home Builders Housing Market Index (HMI), confidence among home builders surged to 78 in August. The latest reading released on Aug 18 not only indicates a 6-point rise from July’s 72 but also marks its highest level matching the December 1998 record.
5 Top Picks
Given the solid housing data, we have shortlisted five homebuilder stocks that sporta Zacks Rank #1 (Strong Buy) and are poised to grow. What’s more? The stocks belong to the Zacks Building Products - Home Builders industry, which has a current-year expected earnings growth rate of 5.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
M/I Homes, Inc. (MHO - Free Report) operates as a builder of single-family homes in Ohio, Indiana, Illinois, Michigan, Minnesota, North Carolina, Florida and Texas. The company has an expected earnings growth rate of 36.7% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 91.2% over the past 60 days.
Century Communities, Inc. (CCS - Free Report) engages in the design, development, construction, marketing, and sale of single-family attached and detached homes. The company has an expected earnings growth rate of 9.1% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 24.5% over the past 60 days.
M.D.C. Holdings, Inc. engages in homebuilding operations that include purchasing finished lots or developing lots for the construction and sale, primarily of single-family detached homes to first-time homebuyers under the name of Richmond American Homes. The company has an expected earnings growth rate of 26.1% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 56.9% over the past 60 days.
D.R. Horton, Inc. (DHI - Free Report) operates as a homebuilding company in East, Midwest, Southeast, South Central, Southwest, and West regions of the United States. The company has an expected earnings growth rate of 33.6% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 22.2% over the past 60 days.
PulteGroup, Inc. (PHM - Free Report) engages in the homebuilding business. The company acquires and develops land primarily for residential purposes; and constructs housing on such land. PulteGroup has an expected earnings growth rate of 22.1% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 44.9% over the past 60 days.
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5 Homebuilder Stocks to Buy as US Housing Starts Surge in July
The U.S. housing sector is emerging as one of the bright spotsof the economy that has been battered by the coronavirus pandemic. In July, America’s homebuilders accelerated the most in nearly four years, surging 22.6% and recording the biggest gain since October 2016.
Per the U.S. Census Bureau and the U.S. Department of Housing and Urban Development’s joint report on Aug 18, U.S. homebuilders began the construction (housing starts) of 1,496,000 homes in July. The figure is above the June’s revised figure of 1,220,000 and beats the consensus estimate of 1,241,000 units.
The report also states, the largest increase in homebuilding has been witnessed in the Northeast region, scaling up 35% from June. Housing starts in the South jumped 33% from the month before and the Midwest and West registered around 6% increase each in July. Additionally, multi-family projects of five units or more surged nearly 57%, marking the largest increase since October 2016. However, single-family construction increased just 8.2% last month.
The same report also stated that building permits in July rose 18.8% to a seasonally adjusted annual rate of 1,495,000, surpassing the consensus estimate of 1,333,000 and June’s revised figure of 1,258,000 units. Building permits issuanceoffers a gauge of residential construction activity in the upcoming month.
The report indicates that July’s construction pace was the fastest since February this year. The coronavirus outbreak had halted the record-long expansion of the U.S. economy, forcing people to stay indoors and shut down businesses. July’s surge now puts housing starts just 4.5% below February’s pace of 1,567,000units.
Additionally, perthe National Association of Home Builders Housing Market Index (HMI), confidence among home builders surged to 78 in August. The latest reading released on Aug 18 not only indicates a 6-point rise from July’s 72 but also marks its highest level matching the December 1998 record.
5 Top Picks
Given the solid housing data, we have shortlisted five homebuilder stocks that sporta Zacks Rank #1 (Strong Buy) and are poised to grow. What’s more? The stocks belong to the Zacks Building Products - Home Builders industry, which has a current-year expected earnings growth rate of 5.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
M/I Homes, Inc. (MHO - Free Report) operates as a builder of single-family homes in Ohio, Indiana, Illinois, Michigan, Minnesota, North Carolina, Florida and Texas. The company has an expected earnings growth rate of 36.7% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 91.2% over the past 60 days.
Century Communities, Inc. (CCS - Free Report) engages in the design, development, construction, marketing, and sale of single-family attached and detached homes. The company has an expected earnings growth rate of 9.1% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 24.5% over the past 60 days.
M.D.C. Holdings, Inc. engages in homebuilding operations that include purchasing finished lots or developing lots for the construction and sale, primarily of single-family detached homes to first-time homebuyers under the name of Richmond American Homes. The company has an expected earnings growth rate of 26.1% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 56.9% over the past 60 days.
D.R. Horton, Inc. (DHI - Free Report) operates as a homebuilding company in East, Midwest, Southeast, South Central, Southwest, and West regions of the United States. The company has an expected earnings growth rate of 33.6% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 22.2% over the past 60 days.
PulteGroup, Inc. (PHM - Free Report) engages in the homebuilding business. The company acquires and develops land primarily for residential purposes; and constructs housing on such land. PulteGroup has an expected earnings growth rate of 22.1% for the current year. The Zacks Consensus Estimate for its current-year earnings has climbed 44.9% over the past 60 days.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +50%, +83% and +164% in as little as 2 months. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>