3 Gaining Homebuilder Stocks to Buy in January 2024

The homebuilding industry is positioned for solid growth due to strong demand for residential properties. The potential interest rate cuts next year, poised to stimulate housing demand, make it prudent to consider investing in fundamentally strong homebuilder stocks Taylor Morrison Home Corporation (TMHC – Get Rating), Hovnanian Enterprises, Inc. (HOV – Get Rating), and M/I Homes, Inc. (MHO – Get Rating).

Before delving deeper into their fundamentals, let’s discuss why the homebuilder industry is well-positioned for growth.

The homebuilder industry’s prospects are shaped by factors such as population growth, rapid urbanization, rising disposable income, and government initiatives promoting affordable housing. The U.S. homebuilder market is anticipated to grow at a CAGR of 4.7% to reach $142.90 trillion by 2028.

According to the U.S. Census Bureau, new single-family home sales in November 2023 were 1.4% higher than in the same period in 2022, with an average sales price of $488,900. The global real estate market is forecasted to grow at a CAGR of 4.14% to reach $9.76 trillion by 2030.

Meanwhile, the heeding concerns and lowering mortgage rates could stimulate home buying, boosting demand in the housing market and benefiting the homebuilding industry. The global residential construction market is expected to grow at a 4.8% CAGR to $8.31 billion by 2032.

Furthermore, the housing market is rapidly integrating smart home technologies like automation, energy management, and interconnected devices, enhancing convenience, comfort, and energy efficiency for an improved living experience.

Considering these conducive trends, let’s analyze the fundamentals of the three Homebuilders stock picks…

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