D.R. Horton: Built To Ride Housing’s New Upswing
In 2 Reasons Rate Rise Makes Homebuilders A Buy, I described how rising interest rates will likely boost home sales, not weaken them. Two important forces could be unleashed by a rate uptrend. First, potential home buyers can be influenced to act sooner, thereby avoiding higher mortgage rates later. Second, banks, seeing an increase in interest (profit) margin coincident with a reduction in refinancing fees, can be driven to readopt their more normal mortgage loan activity by allocating more funds and relaxing their stringent borrower requirements.
The residential construction industry should be a primary beneficiary, and, among the publicly traded homebuilders, D.R. Horton is particularly appealing. Here’s why…
This article is published on SeekingAlpha.com
