High interest, tight supply to cool demand for housing - JPM

Taylor Morrison Home

23/08/2022 18:34

** J.P. Morgan expects housing demand to take a hit in the
coming quarters, albeit maintaining healthy levels
    ** Sees housing market moderate within an environment of
tight supply and high interest rates 
    ** Says July housing sales fell 12.6% sequentially to
511,000, below Street's outlook for a 2.6% decline to 575,000 
    ** Anticipates headwinds to persist and impact valuation on
homebuilders in the near-to-medium term
    ** In spite of a fundamentally healthy backdrop, believes
investor concerns over interest rates and sustainable earnings
as likely to persist
    ** JPM is "overweight" on large-cap homebuilders including
D.R. Horton  DHI.N , PulteGroup  PHM.N , and smaller-cap cos KB
Home  KBH.N , Taylor Morrison Home Corp  TMHC.N  and Century
Communities  CCS.N 
    ** S&P Composite 1500 homebuilder's index  .SPCOMHOME  down
about 31% YTD

 (Reporting by Raechel Thankam Job)
 ((RaechelThankam.Job@thomsonreuters.com;))