Interest rate hikes to cloud homebuilders' outlook - JPM

Century Communities

15/06/2022 13:10

** J.P. Morgan says investor concerns around the impact of
interest rates hike on homebuilders are likely to persist over
the near to medium term
    ** Analyst Michael Rehaut says "several headwinds are likely
to persist and impact valuations over the near to medium term"
    ** In a JP Morgan Conference call, Florida-based Highland
Homes' CEO Joel Adams says demand for homebuilders has slowed
modestly, but that land market remains aggressive despite
increase in interest rates and stabilizing home prices
    ** JPM is "overweight" on large-cap homebuilders D.R. Horton
 DHI.N , Lennar Corp  LEN.N  and PulteGroup  PHM.N , and
smaller-cap cos KB Home  KBH.N , Taylor Morrison Home Corp
 TMHC.N   and Century Communities  CCS.N  
    ** S&P 1500 homebuilder's index  .SPCOMHOME  has fallen
37.6% so far this year vs 21.6% drop in S&P 500  .SP500  

 (Reporting by Nandhini Srinivasan in Bengaluru)
 ((nandhini.srinivasan@thomsonreuters.com))