US housing: BofA downgrades three homebuilders as housing downturn accelerates - August 25, 2022

[sharon sanders]

Housing: BofA downgrades three homebuilders as housing downturn accelerates


Dani Romero
·Reporter
Thu, August 25, 2022 at 1:32 PM·3 min read
I


Analysts from Bank of America cutting their rating on shares of three homebuilders in a note out Thursday as the housing market faces an economic slowdown.

Rafe Jadrosich at Bank of America Global Research downgraded shares of Lennar (LEN) to Underperform from Neutral, and shares of KB Home (KBH) and Toll Brothers (TOL) to Neutral from Buy, as rising interest rates challenge affordability for buyers.

"New home demand has reset lower over the last three months following two years of unprecedented growth," Jadrosich wrote. "Homebuilder earnings and industry data indicate a sharp demand deceleration in June/July as a result of worsening affordability and lower consumer confidence."

Earlier this week, Toll Brothers reported quarterly results that revealed lower delivery expectations and increased incentives amid what CEO Douglas Yearley called a "more of a buyer's market."

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https://finance.yahoo.com/news/housing-market-bank-of-america-downgrade-173236691.html

 

[Emily]

https://finance.yahoo.com/news/hous...n-fed-wants-to-admit-economist-155423878.html
Housing market 'in much worse shape' than Fed wants to admit: Economist

Dani Romero·Reporter
Wed, August 24, 2022 at 11:54 AM

The U.S. housing market is under pressure.

Data this week on new home sales and pending home sales reflected sharp drops from last year and showed the impact higher interest rates continue to have on prospective buyers.

On Wednesday, the latest report on pending home sales from the National Association of Realtors showed contracts to buy previously owned homes fell 1% from June to July and 19.9% from July 2021 to July 2022.

The Pending Home Sales Index — a measure of signed contracts on existing homes — dropped to 89.8 last month, the lowest since the start of the pandemic. Contracts declined for the eighth time in the last nine months, the report said.

On Tuesday, data on new home sales in July showed sales fell 12.6% from the prior month and 29.6% from last year, signaling demand for housing continues to wane as the Federal Reserve continues raising interest rates to slow inflation.

"The housing market is in much worse shape than the Fed has been willing to admit," Ian Shepherdson, chief economist at Pantheon Macroeconomics, wrote in a note following Tuesday's data. "But policymakers have made it clear that inflation is their primary objective, and housing is collateral damage."...