Lower mortgage rates could continue to give the housing market a much needed boost, which could translate to more strength for homebuilders. Rising rates, low affordability and rising homebuilder costs due to tariffs have been thorns in the side for the housing market.
“We still like housing. Interest rates are going lower, the consumer is still strong, and again, we’re not in this recession camp,” said Quint Tatro, founder and president of Joule Financial.
This year, the central bank has been keen to keep interest rates unchanged. In addition, the central bank alluded to possible rate cuts for the rest of 2019.
Once again, however, the rising costs of supplies could keep home prices rising, but that could be tempered if the current labor market remains robust.
“We like to pinpoint valuation, so look at MDC Holdings. The company has a 3% dividend, $7 per share in cash, very attractive balance sheet, but its selling 10x forward earnings and growing next year’s earnings at 20%, so again, I think we steer away from some of the bigger names, look regionally, and we like MDC Holdings here.” Tatro said.
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