Wall Street bets on better days ahead for US homebuilders
Homebuilder stocks are on a tear as investors bet that a dearth of previously occupied homes on the market and moderating mortgage rates will boost builders’ prospects in the spring homebuying season, according to a report from the Associated Press.
Builders are coming off a lousy 2022 as mortgage rates skyrocketed to a two-decade high, sidelining many would-be homebuyers. The surge in borrowing costs after years of soaring home prices pulled the housing market into a deep slump. Sales of new U.S. homes fell about 17% last year from a year earlier to the lowest seasonally adjusted annual rate in four years, according to the Commerce Department.
While many economists project this will be another down year for sales of new and existing homes, some builders are dialing back buyer incentives and raising prices. They’re encouraged by the modest easing in mortgage rates and the prospect of capitalizing on demand this spring at a time when the number of existing homes for sale remains near historic lows.