Latest news with #JayMcCanless
Yahoo
5 days ago
- Business
- Yahoo
Homebuilding sector playbook: 4 top stock picks
Wedbush Securities managing director of equity research Jay McCanless joins Market Domination with Josh Lipton and Prairie Operating Company executive vice president of market strategy Lou Basenese to explain to investors how to play the homebuilding sector, highlighting stock picks like PulteGroup (PHM), Taylor Morrison (TMHC), Tri Pointe (TPH), and M/I Homes (MHO), while cautioning against names like DR Horton (DHI) and LGI Homes (LGIH). To watch more expert insights and analysis on the latest market action, check out more Market Domination here. We're taking a look at the names of the home builder space, companies including DR Horton and PulteGroup reporting earnings on Tuesday, surprising analysts with solid earnings beats. We're navigating how to play the home builder sector with the Yahoo Finance playbook, and joining me now is Jay McCanless, Managing Director of Equity Research at Wedbush Securities. Jay, always good to see you, sir. So we did have a lot of a lot of news, a lot of data on that housing sector, Jay. We had earnings, we had new home sales, existing home sales, you, of course, Jay, know the home builder space so well. Maybe start broadly, Jay, high level. You look at the home builders as a sector, which you've covered a long time, you know, are you cautious, Jay? Are you constructive? How are you thinking about it? Yep, and thanks for having me on. So I'd say on the builders that get most of their business from from move up, these are people are selling a home to buy a new home. We're still constructive on those names. I would put Pulte in that group, as well as Taylor Morrison, Tri Pointe, and MHO, MI Homes. But we're a little more conservative, cautious on the entry level sellers with names like DR Horton, as well as LGIA, and some of the other names there. And I think it all comes down to confidence, you know. Every builder this week talked about how the consumer, especially the low-end consumer, is just not very confident about their financial situation and what's going on with tariffs, etc. So until we see some improvement there and or some improvement in mortgage rates, which have basically been stuck at about 7% for for over a year now, it's hard to see how things are going to get better on the low end. Given the uncertainty there, Jay, you're kind of mentioning about the backdrop, are builders changing at all what they're building, Jay? Are they sort of adjusting in terms of, you know, size and price? Absolutely. So what we've seen is a couple of things: The builders have dialed back on their housing starts until the consumer, I think I think, feels a little more engaged, more ready to buy a home. But the other thing the builders have done where they can is bring the square footages down. That's the easiest way to solve for affordability is you know, take the bonus room off, do something like that, one less bathroom. But I think at some point, we need we need to get some help on rates because I think the the builders, and especially some of the entry level names, Horton, Lennar, they've done about all they can do on shrinking the shrinking the envelope. At this point, it's again, need some rate help or or need some help on the income side for consumers to get a little more income to to be able to to afford these homes. Lou, I want to bring you here as well. Jay talked about rate help. I'm just looking at the 30-year fixed here, Lou, mortgage news daily. We're still at 6.81%. Yeah, I mean, I look at the the data here, and Jay, I'm curious your thoughts here. I look at it for existing home sales, and you see those mortgage rates once they jumped above 5%, we just shifted into reverse and now neutral with those rates pinned up there, even new home sales. So you you talked about a kind of a 911 for rate help. How much help do you think 25 basis points lends to the to the to the sector? Is it need to be more like 50 to 100 before you really see the impact, and how quickly could it help impact the the the progress in the sector? Yeah, sure. So what the builders have told us is they are buying down mortgage rates generally to somewhere in they call it 5 and a quarter to 5 and three quarters on a 30-year mortgage. So the the faster we can get the actual base rate down to that level, that's when it helps. But, you know, if we were to go to low sixes, high fives, again, I think that could help. But yeah, the 25 basis points we've seen versus last year, it's certainly heading the right way, but but we would like to see more. I think the other thing that builders have been doing is is not only doing rate buy-downs to make the homes more affordable, but they're trying to do things like adding some closing cost assistance, where where people are eligible for it, helping them apply for down payment assistance. There are multiple organizations that provide that now. So the the the builders doing everything they can without being able to move the rates, of course, beyond doing the buy-downs. But yeah, we we'd love to see something more like a five handle instead of the six handle where we are. Jay, what what is investor sentiment around the space and sector right now versus, you know, six months ago, 12 months ago? I'd say it's been surprisingly positive. We had a lot of inbounds ahead of earning season. You know, you saw Horton have a very sharp upward move, I think, 17% on Tuesday. You know, people understand that there's a lack of housing in this country. They understand that the demographics and the population tailwinds are still there. It's just the consumer doesn't feel as confident this year as they did last year. So I think investors are kind of being picky and choosy about what what they want to own right now. But I think again, they realize the underlying demand trends are still pretty strong for the group. So it's just, when's the right time to get in, right? So we we think for for the move up names now is a good time. And then when we get to later on in the fall and people start to think about spring '26, then maybe some of these entry level names will will look a little more attractive then. Jay, just I'm curious, final question here. Given Trump's immigration policies, Jay, what, if anything, have you heard from the home builders about any kind of material impact to labor? So I'll I'll I'll add the tariffs onto that as well. The tariff impact has been much less, I think, than the builders expected. Some of the builders had had built in a little conservatism into their guidance, and they've rolled that off now. In terms of of ICE affecting ICE raids affecting the the ability to get homes built, it really hasn't panned out that way. I think if anything, the builders have talked about excess availability of labor, which is helping them get get better rates to get the homes built, and build them a little more quickly than than they could have a year ago and especially two years ago. Jay, always great to have you on the show. Thanks so much for joining us. Thank you.
Yahoo
17-06-2025
- Business
- Yahoo
Lennar earnings & outlook: The impact of mortgage rate incentives
Lennar (LEN) reported mixed second quarter earnings results and issued a weaker-than-expected third quarter outlook for new orders and deliveries. Jay McCanless, managing director of equity research at Wedbush Securities, joins Catalysts to break down the latest on the stock, the earnings report and outlook, and how incentives like mortgage rate buy-downs are impacting the broader homebuilding sector. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
04-06-2025
- Business
- Yahoo
Spring home buying season was 'lackluster'
Traditionally, there is a lot of home buying and selling in the Spring. But not this year, according to Wedbush Securities managing director Jay McCanless, who describes the season as "pretty lackluster." In the video above, you can hear McCanless's take on the housing market as well as which homebuilder stocks he sees as buys. To watch more expert insights and analysis on the latest market action, check out more Asking for a Trend here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
21-05-2025
- Business
- Yahoo
Toll Brothers earnings: Housing demand still out there, analyst says
American homebuilder Toll Brothers (TOL) is maintaining its full-year guidance, as outlined by CEO Douglas C. Yearley, Jr., after reporting a fiscal second quarter beat on earnings and revenue estimates. Wedbush Securities SVP of equity research Jay McCanless comes on Catalysts to speak with Madison Mills and her guest host, Invesco's Brian Levitt, about the housing and order demands and broader homebuyer confidence that Toll Brothers is seeing. To watch more expert insights and analysis on the latest market action, check out more Catalysts here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
