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Housing market inventory is so scarce that builders will be in the driver's seat for years to come, says KB Home's CEOHousing market inventory is so scarce that builders will be in the driver's seat for years to come, says KB Home's CEO

Homebuilders are thriving due to a chronic shortage of existing housing inventory, leading to increased home prices and strong sales, according to KB Home CEO Jeffrey Mezger. The lack of inventory is also reflected in the significant drop in active home listings, with only Austin returning to pre-pandemic levels, while other markets have experienced substantial declines. Despite rising mortgage rates, the scarcity of existing inventory has prevented a steep national home price decline.

fortune.com
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KB Home CEO Jeffrey Mezger discusses the dramatic shifts in the housing market since the pandemic hit, the rebound in new home sales, and the strategies utilized by KB Home to maintain sales, including price cuts and buydowns. Mezger believes that the housing market has reached its bottom, but acknowledges that the metric to watch is inventory levels.
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US homebuilders are losing confidence in the housing market as mortgage rates remain high, causing a decline in buyer purchasing power and a negative outlook for the industry.
The Greater Boston housing market experienced a slow month in August, with home sales dropping to their lowest point for the month since 2010, primarily due to higher interest rates and a shortage of available homes for sale, leading to increased competition and higher prices for buyers.
U.S. homebuilder confidence fell to its lowest level since April in September due to high interest rates, leading to decreased affordability for buyers and a decline in demand for new home construction.
The U.S. housing market is facing a shortage of homes, which is driving up prices and making it difficult for buyers to find affordable options, and the problem may get worse as builders become less confident and hesitant to construct new homes due to high mortgage rates and construction costs.
U.S. homebuilding fell to a three-year low in August due to higher mortgage rates, but permits for new construction increased, signaling support from a shortage of homes on the market.
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In this article, the stock mentioned is KB Home (NYSE:KBH). The author's recommendation is to buy and hold the stock. The author's core argument is that KB Home is well-positioned in the housing market, particularly because it serves first-time and second-time homebuyers, who represent a growing pool of potential buyers. The author also points out that KB Home has a strong balance sheet, generates significant cash flow, and has been reducing its debt and repurchasing shares. Key information and data provided in the article include: - KB Home's fiscal Q3 earnings, where it earned $1.80 on revenue of $1.59 billion, surpassing expectations by $0.38. - The decline in KB Home's earnings and margins due to a 14% decrease in revenues and declining average sales prices. - The decline in deliveries and sales prices, as well as the decline in homebuilding gross margins. - The increase in net new orders and the stabilization of the backlog, indicating steady demand. - The improvement in KB Home's balance sheet, reduction of debt, and focus on share repurchases. - The favorable macro environment for KB Home, with the rise in millennials becoming homebuyers, supply constraints, and a significant housing shortage. - The expectation of strong profits for the next few years and potential for double-digit returns. - The current valuation of KB Home's shares and the potential upside. Note: The article is an opinion piece by the author and not financial advice.
Despite a recent slump, research firms including Freddie Mac, Zillow, and the National Association of Realtors predict that home prices will continue to rise in 2024 due to a shortage of housing inventory and strong demand, with NAR forecasting a 2.6% increase. However, Moody's Analytics and Morgan Stanley expect home prices to slightly decrease in 2024 due to declining affordability and increased housing supply.
Home prices continued to rise in August due to low inventory and high mortgage rates, causing a drop in home sales, according to a report from the National Association of Realtors.
The United States housing market has seen a 21 percent decline in previously occupied home sales over the past year, continuing the slowdown caused by rising interest rates, while prices continue to rise despite the decrease in sales, leading to a shortage of affordable homes and worsening home affordability for the foreseeable future.
Sales of previously owned homes in the US fell for the third consecutive month in August, as higher mortgage rates, rising prices, and a lack of available properties have limited homebuyers' options.