Homebuilders

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.

The broader economy added 150,000 positions, a number the bond market initially read as likely to soften rates, but some economists interpreted differently.

The transactions grew between second and third quarter, with the new-home market seeing one of its largest surges in cash-buying in 13 years.

The company's builder and mortgage banking segments both ended up in the black, as sales for new constructions outperform the existing-home market.

Homebuilder sentiment fell to a nine-month low in October, the latest indication of the toll on residential real estate from soaring mortgage rates and declining affordability.

Analysts say major single-day declines are historically attractive entry points for builders. Homebuilding stocks have only seen 55 instances of single-day declines of more than 5% since the global financial crisis, according to the firm. 

On average since 1970, new home sales volumes decline 7% month-over-month in September and 13% quarter-over-quarter in the final months of the year, according to analysts. 

The National Association of Home Builders/Wells Fargo gauge declined 5 points to 45 after sliding 6 points a month earlier. That marked the largest back-to-back decrease in nearly a year.

Loan applications for single-family constructions jumped for the seventh month in a row, with increasing interest coming from first-time buyers, according to the Mortgage Bankers Association.

Decreased availability of bank capital for new commercial construction helped slow activity from the previous nine quarters, according to a new report.

Purchases of new single-family homes increased 4.4% to an annualized 714,000 pace after downward revisions to prior months, government data showed Wednesday.

The share is the largest on record for a second quarter, according to data from Redfin.

Lenders appear to be loosening underwriting a little and the construction industry may be on track to lower new home prices by 10%-15% this year.

Residential starts increased 3.9% last month to a 1.45 million annualized rate, according to government data released Wednesday.