5 Housing Stocks To Soar, Braving Weak December Home Sales

Other hurdles such as rising prices owing to the limited land availability are keeping the affordability in check. Again, homebuilders continue to struggle with growing labor shortage, higher material costs, and a constrained mortgage environment.

Market pundits are a shade worried that rising mortgage rates and caps on the deduction for mortgage interest following a recent overhaul of the tax code is likely to slow demand this year. That said, the latest report from the Mortgage Bankers Association, released on Jan 24, showed applications for loans to buy a home surging last week to their highest level since April 2010. Hence, despite concerns of chances of a series of interest rate hikes by the Federal Reserve, that are restricting homebuilders to respond to the growing demand to some extent, the overall demand picture remains quite strong, courtesy of strong economic growth and low level of unemployment.

Investing in the homebuilding industry might sound profitable right now, as it falls within the top 8% (20 out of 256 industries) of the Zacks Industry Rank, which hints at further growth.

Stocks to Bet on

We have identified five homebuilding stocks based on a favorable combination of a Zacks Rank #1 (Strong Buy) or 2 (Buy) and a Growth Score of A or B. These stocks are backed by sound fundamentals, surging share price and a track record of better-than-expected results. You can see the complete list of today’s Zacks #1 Rank stocks here.

Here are the top five stocks that passed the screen.

NVR, Inc. (NVR - Free Report) carries a Zacks Rank of #2 (Buy) and has a Growth Score of A. It is expected to witness year-over-year EPS growth of 24.4% in 2018. In the last year, the stock has surged almost 91%, outperforming the industry growth of 58.7%.

KB Home (KBH - Free Report) has escalated more than 105% in the last year and carries a Growth Score of A. This Zacks Rank #2 stock’s earnings are expected to witness 36.2% growth this year.

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Disclosure: Zacks.com contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any ...

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