KB Home is set to report its third-quarter fiscal 2024 results on Sept. 24, with analysts anticipating continued growth despite industry challenges. The company’s strong demand for built-to-order homes, strategic pricing, and focus on affordability position it well, though rising costs and market uncertainty remain factors to watch.
In a bid to revive its struggling real estate sector, China is considering relaxing some of the most stringent home purchase restrictions, potentially allowing non-local buyers to purchase homes more easily in major cities. This move, along with proposed changes to mortgage rates and down payments, aims to reverse a four-year housing slump that has dampened economic growth.
Mortgage rates continue to fall, reaching a new low since February 2023, as the Federal Reserve’s recent interest rate cut sparks increased demand for refinancing and home purchases. This decline in rates, which has been ongoing for several weeks, is reviving activity in the housing market.
MillerKnoll, Inc. (MLKN) reported first-quarter earnings that fell short of analysts’ expectations, sending its shares down after the closing bell. The company cited a tepid housing market as a factor in the lower-than-expected revenue, but also highlighted operational improvements that are driving margin growth.
Lennar Corporation, a leading homebuilder, exceeded analysts’ expectations for both earnings and revenue in the third quarter. The company saw strong growth in new orders and deliveries, fueled by a favorable economic environment and high demand for housing. Despite affordability challenges, Lennar’s sales incentives helped drive increased deliveries and new orders.
The housing market is experiencing a lull as potential homebuyers wait for the upcoming presidential election to make a move. Despite lower mortgage rates, pending home sales have declined, suggesting buyers are hesitant due to political uncertainty and concerns about future housing policies. While some wait for rates to fall further, others hope for clarity on housing policies. However, underlying demand remains strong, indicated by rising homebuyer activity and mortgage applications.
Lennar and PulteGroup, leading homebuilders, have hit 52-week highs as investors anticipate a Federal Reserve rate cut. The expected rate reduction could further boost the already resurgent housing market, driven by lower mortgage rates and increased demand.
New construction of single-family homes in the US experienced a significant jump in August, fueled by declining mortgage rates and the anticipation of a Federal Reserve interest rate cut. This positive trend suggests a resurgence in the housing market, potentially indicating economic resilience.
The average interest rate for a 30-year fixed mortgage dropped to its lowest point in two years, falling to 6.15% for the week ending September 13. This decline comes as markets anticipate a potential interest rate cut by the Federal Reserve, possibly as large as 50 basis points. The drop in mortgage rates has led to a surge in refinancing activity, with applications more than doubling compared to last year.
California home sales experienced a seven-month low in August, as buyers adopted a wait-and-see approach despite falling interest rates. The statewide median home price remained relatively stable, edging up slightly from July. However, the sales pace fell from the previous month and was up only slightly from a year ago. The report suggests that buyer demand may be slowly increasing and sales could rise towards the end of the year, pending further interest rate cuts.
