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The Rise of the Home Builder Industry: Addressing the Housing Deficit

I think some housing stocks are a good buy today

Ney Torres H

Aug 28, 2023

In the aftermath of the 2008 financial crisis, the U.S. faced an unexpected challenge in the housing sector. Home construction witnessed a significant slump as the economy grappled with financial downturns and market shifts. Fast forward to today, and the ripples of that slowdown have resulted in an astonishing estimated deficit of about six million homes*.

This lack of housing inventory has created a scenario ripe for home builders. Demand for homes has surged, not just due to the sheer lack of available housing options but also driven by other intertwined economic factors and market dynamics. Even when faced with potential economic challenges, such as fluctuating mortgage rates, homebuilders have found themselves in a position of strength, thanks to the persistent and seemingly insatiable demand.

Interestingly, this rising trend hasn't gone unnoticed in the investment world. Recent chatter suggests a renewed interest in stocks related to the home builder industry. While the specifics of these investments remain under wraps, it's clear that the market is paying attention to the opportunities presented by this housing deficit.

The home builder industry stands at a pivotal juncture, poised to address and capitalize on a significant housing shortage. As the U.S. navigates its way through this housing challenge, it's evident that homebuilders will play a crucial role in shaping the future of American housing.

This week, I’ll write about $LL, $HD, and some Mexican home builders due to the abovementioned factors.

*That shortage is estimated to range from 1.5 million units, according to the Robert Dietz, chief economist for the National Association of Home Builders (NAHB), to some 4.4 million units, according to Fannie Mae — and up to 7.3 million units per the National Low Income Housing Coalition. -https://www.housingwire.com/articles/homebuilders-are-at-max-capacity-and-the-housing-shortage-keeps-widening/#:~:text=That%20shortage%20is%20estimated%20to,National%20Low%20Income%20Housing%20Coalition.