Homebuilders

In the quarter, 80% of the homebuilder's mortgage customers used the rate buy-down incentive, the company said on a call with analysts.

Sekisui House Ltd. announced a $4.9 billion agreement on Thursday to buy MDC Holdings Inc., ikely the biggest U.S. purchase of a homebuilder by a Japanese company.

Lending activity among builders surged over 22% annually in December, but the growing share of FHA-backed borrowing in the segment took a step back for the first time in four months, the Mortgage Bankers Association said.

Single-family home construction fell by the most since July 2022, following a surge in November, while multifamily projects rose to a five-month high.

But the index is still well below pre-pandemic levels, suggesting momentum may be slow to build with borrowing costs still twice as high as they were two years ago.

Purchases of new single-family homes decreased 12.2% to a 590,000 annual pace last month, a one-year low, government figures showed Friday.

Toll Brothers Inc. stock rose as the homebuilder's executives pointed to "solid" demand in recent weeks as mortgage rates pulled back from two-decade highs. 

Real estate finished November as the second best performing group in the S&P 500 Index adding 12%, trailing slightly behind tech's 13% gain. The momentum was fueled by bets the central bank may begin cutting rates as early as next year.

Residential starts increased 1.9% last month to a 1.37 million annualized rate, the highest in three months, government data showed Friday.

With mortgage rates retreating and inflation abating, short sellers who'd been capitalizing on the three-month slump in homebuilder stocks may need to prepare for a rebound toward year-to-date highs.