The weak housing market is crushing U.S. homebuilders. Can the sector make a comeback?

  • 📰 globeandmail
  • ⏱ Reading Time:
  • 28 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 14%
  • Publisher: 92%

South Africa News News

South Africa South Africa Latest News,South Africa South Africa Headlines

While U.S. homebuilders might not be the most popular stocks for Canadian investors, they offer a fascinating window into the outlook for housing

In Canada, the best five-year fixed mortgage rate has more than doubled this year, to 4.69 per cent, according to Ratehub.ca. In the United States, the 30-year fixed rate mortgage climbed to 6.94 per cent this week, according to U.S. housing finance giant Freddie Mac; that’s a 20-year high and up from 3.09 per cent a year ago.Sale prices for Canadian existing single-family homes in major markets fell 3.1 per cent in September, from August, according tohouse price data released this week.

“The relentless surge in mortgage rates to around the 7 per cent mark has caused the sharpest one-year deterioration in affordability on record,” Robert Kavcic, senior economist at Bank of Montreal, said in a note this week, referring to the U.S. housing market. So far, profits appear to be holding up: In September, Lennar reported a 4-per-cent increase in its fiscal third-quarter profit, compared with a year ago. KB Home reported a 70-per-cent increase in profits over the same period. Clearly, the healthy backlog in orders is helping.

 

Thank you for your comment. Your comment will be published after being reviewed.
Please try again later.
We have summarized this news so that you can read it quickly. If you are interested in the news, you can read the full text here. Read more:

 /  🏆 5. in ZA

South Africa South Africa Latest News, South Africa South Africa Headlines