The Zacks Analyst Blog Dream Finders, Taylor Morrison, KB Home and Lennar

For Immediate ReleasesChicago, IL – November 29, 2024 – Zacks.com announces the list of stocks and 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 including Dream Finders Homes, Inc. DFH, Taylor Morrison Home Corp. TMHC, KB Home KBH and Lennar Corp. LEN.Here are highlights from Friday’s Analyst Blog:New Home Sales Shrink in October: Here's What's Troubling HomebuyersAccording to the U.S. Department of Housing and Urban Development and the U.S. Census Bureau, new single-family home sales declined 17.3% in October to 610,000 units (seasonally adjusted rate) from September 2024. The new home sales value of October reflects a 9.4% decline year over year.The housing market in the country seems to be under pressure due to higher mortgage rates and increased material costs for builders, making it difficult for prospective buyers to make home-buying decisions.Here’s What You Should Know About Housing Market TrendsComparing year over year, the decline in new home sales was primarily due to a drop of 19.7% in the South and 1.3% in the West, partially offset by an increase in sales of 35.3% in the Northeast and 15.9% in the Midwest. On the other hand, when compared with the prior month, new home sales were negatively impacted by a decrease of 27.7% in the South and 9% in the West, partially offset by an increase of 53.3% in the Northeast and 1.4% in the Midwest.The median new home sale price or ASP (average selling price) during the month was $437,300, up 2.6% from September 2024 and 4.7% year over year.Per Danushka Nanayakkara-Skillington, NAHB’s assistant vice president for forecasting and analysis, “new construction remains a vital part of the market, especially in areas with low existing home inventory.” As of October, the new single-family home inventory was at a level of 481,000, up 8.8% year over year, representing about 9.5 months’ supply at the current building pace. Among the given inventory, ready-to-occupy inventory was 116,000, representing only 24% of total inventory.Mortgage Rates & Other Economic AspectsPer Freddie Mac, as of the week ending Oct. 31, the 30-year fixed-rate mortgage increased 64 basis points (bps) to 6.72% from 6.08% in the last week of September.After the 50-bps interest rate cut on Sept. 18, 2024 and the 25-bps cut on Nov. 7, the current benchmark stands at 4.5-4.75%. Though inflation might have eased a bit, it is yet to reach the optimal rate of 2%. Although the Fed hinted toward rate cuts in the remainder of 2024 and 2025, the magnitude might not be as expected by investors. The rate cuts will indeed depend on how the market factors are acting toward easing inflation.Given such a macroeconomic scenario, housing demand in the country is being affected as mortgage rates remain inflated, making it difficult for homebuyers to navigate between tighter budgets and increased borrowing costs.Our Take on the ScenarioThe ongoing disparities in the market are hurting the Building Products - Home Builders industry as evidenced by its underperformance in the past year compared with the broader sector. During the said time frame, the industry has gained 43.8% compared with the sector’s rise of 46.5%. The Zacks S&P 500 composite rose 32.4% in the said time frame.Homebuilders like Dream Finders Homes, Inc., Taylor Morrison Home Corp., KB Home and Lennar Corp. are also being affected by the ongoing market challenges, but their in-house business strategies and diversified home-sale portfolio are aiding them in the tough times.Discussion on the Abovementioned HomebuildersDream Finders: This Florida-based homebuilding company currently sports a Zacks Rank #1 (Strong Buy). The stock has gained 29.8% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for DFH’s 2025 earnings per share (EPS) indicates 0.5% year-over-year growth. The company’s earnings surpassed the Zacks Consensus Estimate in two of the trailing four quarters and missed on the remaining two occasions, the average surprise being 4.3%.Taylor Morrison: This Arizona-based homebuilder and developer currently carries a Zacks Rank #2 (Buy). The company’s shares have risen 65.7% in the past year.Estimates for TMHC’s 2025 earnings imply 11.2% year-over-year growth. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 11.5%.KB Home: This Los Angeles-based homebuilding company currently carries a Zacks Rank #3 (Hold). The stock has increased 56.8% in the past year.The consensus estimate for KBH’s fiscal 2025 EPS indicates an 8.5% year-over-year increase. The company’s earnings surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met on one occasion, the average being 10.8%.Lennar:Based in Miami, the company is engaged in homebuilding and financial services in the United States, and currently carries a Zacks Rank 3. The stock has gained 36.7% in the past year.The consensus estimate for LEN’s fiscal 2025 EPS suggests an upside of 13.1% year over year. The company’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average being 10.3%.Why Haven't You Looked at Zacks' Top Stocks?Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.Today you can access their live picks without cost or obligation.See Stocks Free >>Media ContactZacks Investment Research800-767-3771 ext. 9339support@zacks.com                                     https://www.zacks.com                                                Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. 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Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report KB Home (KBH): Free Stock Analysis Report Lennar Corporation (LEN): Free Stock Analysis Report Taylor Morrison Home Corporation (TMHC): Free Stock Analysis Report Dream Finders Homes, Inc. (DFH): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks