FMHQ (Friday Morning Housing Quant)

Takeaway: The builders, under pressure for the last 3-4 weeks, are now roughly flat QTD, while the housing ETFs remain up 3-4% QTD.

Our FMHQ (Friday Morning Housing Quant) tables present the state of the publicly traded homebuilders in a visually-friendly, quantitative format that takes about 60 seconds to consume. 



  • Housing Macro | Rates:  Alongside the labor supply consternation coming out of 3Q builder earnings and some incremental softening in the demand data over the last month, the primary macro factor impacting the space has been the rise in rates.  Rates on the 10Y TSY are up +34bps over the last 20 trading days as the market priced in a rising probability of movement in the policy rate out of the Fed in December.  The shift in 30Y Mortgage Rates has been notably more muted, rising just +11bps over the same period.  Outside of (what have become) recurrent bouts of rate volatility, our late-cycle macro expectation on rates remains lower-for-longer – a view finding some further confirmation this morning with domestic retail sales disappointing and wholesale price inflation missing expectations and accelerating further into the negative at -1.6% YoY. 
  • Performance Roundup: It's safe to say that the housing stock complex has been weak of late. Interestingly, in spite of a spate of weak earnings prints and subdued outlooks, the average builder stock remains roughly flat QTD. QTD absolute returns for ITB and XHB stand at +3.9% and +3.1% vs the S&P 500 +6.6%. Meanwhile, the average builder from our tables below is -0.9% QTD. Our preferred four horsemen of 4Q among builders are NVR, LEN, BZH & KBH, which are +6.9%, +1.2%, +5.3%, -3.5% QTD. The three best performing builders thus far this quarter are NVR, DHI (+5.6%) and BZH. The three worst performing builders are TMHC (-13.6%), PHM (-5.0%) and MTH (-4.2%).

  • Insider Buying: A Director at Hovnanian (HOV) purchased 20k shares (~$45k) in late October. Outside of that, there's been no recent insider buying in the sector.
  • Beta: The highest beta names (1YR) remain HOV (1.51), KBH and BZH which are at 1.34 and 1.36, respectively. At the other end of the spectrum, the lowest beta plays are NVR (0.60), MDC (0.92) and TOL (0.99).
  • Short Interest: CAA, KBH and DHI have seen SI creep higher, rising as a % of SO by 5.0%, 4.2% and 1.5%, respectively in the latest month. TMHC, HOV & MTH have seen SI fall by 2.3%, 2.0% and 1.8%, respectively.
  • Sell Side Sentiment: MTH has seen the largest drop in sell side support (-10.1% 1M change), while BZH has seen the largest bump in support (+9.1% 1M change).
  • Valuation: The cheapest names in the group currently are BZH (7.4x), TPH (9.3x) and TMHC (8.7x), while the most expensive are NVR (15.0x), LEN (12.5x), and TOL (13.1x).


FMHQ (Friday Morning Housing Quant) - BQ 1

FMHQ (Friday Morning Housing Quant) - BQ 2


FMHQ (Friday Morning Housing Quant) - BQ 3


FMHQ (Friday Morning Housing Quant) - BQ 4




Joshua Steiner, CFA


Christian B. Drake

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