Homebuilder stock is about to enter the “Golden” stretch. Since 1999, builder stocks have generally hit bottom around the end of October and then risen, on average, 18.3% through the end of April. Despite the fact that builders are up 25% this year already, analysts are expecting this year to be no different than previous years. So far this year, builders have broken ground on more new single-family houses, which are almost all built for purchase, not rent.
According to MarketWatch, “Homebuilders are a buy, according to a chorus of analysts. That may seem surprising, and even counter-intuitive given slowing U.S. economic growth, but lower mortgage rates, improving affordability, and seasonal trends are all giving homebuilders a boost.”