'Rapid Descent': Mortgage Rates Are Shocking Experts. Is Housing Getting More Affordable?
Portfolio Pulse from Neil Dennis
Mortgage rates have fallen significantly, with the average 30-year rate dropping to 6.61% from a peak of 7.79%. Freddie Mac's chief economist notes a stabilizing trend and a positive economic outlook. Homebuilders and the iShares U.S. Home Construction ETF (ITB) have seen strong stock gains, with ITB up 68% in 2023. DR Horton (DHI) and Lennar (LEN) reported surges in net sales orders and share price increases, benefiting from limited supply and strong demand. Economists predict further easing of price pressures in 2024.
December 29, 2023 | 5:48 pm
News sentiment analysis
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POSITIVE IMPACT
DR Horton (DHI) reported a 39% surge in net sales orders and a 71% increase in share price over the year, with a 50% gain since late October.
DHI's strong sales performance and share price increase are indicative of robust demand and limited supply, which should continue to drive positive momentum.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 95
POSITIVE IMPACT
iShares U.S. Home Construction ETF (ITB) gained 68% in 2023, with a 43% increase since late October, reflecting positive sentiment in the housing sector.
The decline in mortgage rates and positive economic indicators suggest continued investor interest in the housing sector, likely benefiting ITB in the short term.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Lennar (LEN) saw a 32% increase in new orders and a 65% rise in share price this year, with a 43% increase since the end of October.
Lennar's significant gains in new orders and share price reflect the company's strong position in the market, likely to be sustained in the short term.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90