D.R. Horton, Meritage Homes, Taylor Morrison Home, M.D.C. and TRI Pointe Group

For Immediate Release

Chicago, IL – July 24, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: D.R. Horton, Inc. DHI, Meritage Homes Corp. MTH, Taylor Morrison Home Corp. TMHC, M.D.C. Holdings, Inc. MDC and TRI Pointe Group, Inc. TPH.

Here are highlights from Thursday’s Analyst Blog:

Mortgage Application Volume Rises: 5 Stocks to Buy

Homebuyer demand is finally heating up. According to the Mortgage Bankers Association, total mortgage application volume rose last week from the previous week as more buyers rushed to buy new homes with states gradually lifting restrictions.

The news comes at the back of growing demand for new homes. New home sales surprisingly jumped in May, according to a monthly survey by John Burns Real Estate Consulting. This means both homebuilders and buyers have once again started showing confidence in the economy, signaling that the worst of the economic downturn is probably over.

Mortgage Application Volume Expands

According to the Mortgage Bankers Association, total mortgage application volume rose 4.1% from the previous week. The average 30-year fixed rate mortgage rose slightly to 3.2% from 3.19%.

However, some creditworthy borrowers are being offered rates below 3%, which helped push refinance application volume up 5% for the week and up 122% compared with the same week a year ago. Also, the refinance share of mortgage activity jumped to 64.8% of total applications from 64.2% the week earlier.

Home Sales Set to Grow

Sales of newly built homes jumped a whopping 55% in May according to a monthly survey by John Burns Real Estate Consulting. The jump is also the highest pace of sales growth since the height of the unprecedented housing boom in 2005. 

Also, the United States witnessed an uptick in homebuilder sentiment in May. The National Association of Home Builders/Wells Fargo Housing Market Index climbed seven points to 37 in May after a record plunge in April.

Coronavirus resulted in record job losses in April, and a collapse in manufacturing output and retail sales. People backed out from buying homes as they feared blocking their money by investing in property. However U.S. consumer confidence and consumer spending improved in May, indicating that life is somewhat going back to normal and buyers who had postponed plans will once again go searching for new homes.

Our Choices

The rise in mortgage application volume coupled with a jump in new home sales is an indication that buyers are showing interest with the U.S. economy gradually reopening and people going back to work. In this opportune time to invest in homebuilding, we suggest four stocks with a Zacks Rank #1 (Strong Buy) that are likely to gain ahead. You can see the complete list of today’s Zacks #1 Rank stocks here.

D.R. Horton, Inc. is one of the leading national homebuilders, primarily engaged in the construction and sale of single-family houses both in the entry-level and move-up markets.

The company’s expected earnings growth rate for the current year is 14.5%. The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the past 60 days. 

Meritage Homes Corp. primarily engages in building and selling single-family homes for entry-level, first-time, move-up, luxury and active adult buyers in historically high-growth regions of the United States.

The company’s expected earnings growth rate for the current year is 3.1%. The Zacks Consensus Estimate for current-year earnings has improved 32.9% over the past 60 days. 

Taylor Morrison Home Corp. is a homebuilder and land developer engaged in building single-family detached and attached homes for first-time buyers.

The company’s expected earnings growth rate for next year is 71.4%. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days. 

M.D.C. Holdings, Inc. engages in homebuilding and financial service businesses in the United States. It is engaged in the construction, sale and related financing of residential housing and the acquisition and development of land for use in the Denver, Phoenix, Maryland, Virginia, mid Atlantic region, Las Vegas, Dallas and California metropolitan areas. 

The company’s expected earnings growth rate for next year is 14.4%. The Zacks Consensus Estimate for current-year earnings has improved 1% over the past 60 days.

TRI Pointe Group, Inc. is involved in the design, construction and sale of single-family homes. The company’s operating portfolio includes Maracay Homes in Arizona; Pardee Homes in California and Nevada; Quadrant Homes in Washington; Trendmaker Homes in Texas; TRI Pointe Homes in California and Colorado; and Winchester Homes in Maryland and Virginia. 

The company’s expected earnings growth rate for next year is 21%. The Zacks Consensus Estimate for current-year earnings has improved 3.5% over the past 60 days.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.

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TRI Pointe Group, Inc. (TPH) : Free Stock Analysis Report
 
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
 
Meritage Homes Corporation (MTH) : Free Stock Analysis Report
 
M.D.C. Holdings, Inc. (MDC) : Free Stock Analysis Report
 
Taylor Morrison Home Corporation (TMHC) : Free Stock Analysis Report
 
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