Two big homebuilders missed Wall Street estimates on a key metric — here's why

Published On Oct 13, 2024, 11:07 AM

Two prominent U.S. homebuilders, Lennar (LEN) and KB Home (KBH), reported quarterly net new home orders below Wall Street expectations. Lennar's orders rose 4.7% year-over-year to 20,587 but fell short of the forecast of 20,827. KB Home saw a slight decline of 0.4% to 3,085 orders, missing the estimated 3,345. The weak results are attributed to uncertainty around mortgage rates, which have fluctuated between 6% and 7%, alongside economic ambiguity and upcoming elections. Analysts expect similar underperformance among other builders like PulteGroup and D.R. Horton in their upcoming earnings announcements.

Read full article

Stock Forecasts

LENView LEN chart on TradingView

Negative

Given the disappointing orders from major players in the housing market and uncertainty surrounding mortgage rates, it's likely that investor sentiment will remain cautious towards the homebuilders sector in the near term. Upcoming earnings reports may show further alignment with these trends, suggesting potential downside ahead.

KBHView KBH chart on TradingView

Negative

KB Home's missed orders highlight broader concerns in the housing sector, particularly as mortgage rates fluctuate. The market reaction may lead to a negative shift in KB Home's stock as investors anticipate similar trends in other builders, further impacting overall confidence in home construction stocks.

Related News

Housing crisis: Do homes for $1 schemes work?

Oct 6, 2024, 7:21 PM

Baltimore is allowing people to buy homes for next to nothing to try to improve neighbourhoods.

LEN

Mortgage applications hit 2-year high as refinancings surge

Sep 25, 2024, 7:00 AM

Applications to refinance or purchase a home in the week that ended Sept. 20 rose 11% week over week, according to the Mortgage Bankers Association.

BK
LEN
DHI

Jerome Powell says the Fed can cut rates but it can’t fix the housing crisis

Sep 19, 2024, 4:14 PM

“This is not something that the Fed can really fix,” he said after delivering a historic rate cut.

LEN
DHI