Savvy Trades and Investments

[cliffvb]

Home builders are mostly up today as several are reporting strong results that beat analyst estimated. Surprising considering how much mortgage rates have risen over the last year. CCS is up over 7% today, reporting Q3 eps of $2.58 vs analyst estimate of $1.59. My favorite, MHO reported quarterly earnings of $4.82 vs estimate of $4.27.New contracts were up 50% so sales are not slowing down either.Their cancellation rate dropped to 10% from 17% a year ago. BV increased to $87, up about 25% from a year ago.
PHM, MDC, TMHC, and TPH also beat analyst estimates. The home builders are buying down interest rates on mortgages, while holding or even increasing prices despite a reduction in some of their input costs 9mainly lumber). I don't expect builder stocks to take off again while increasing mortgage rates are in the news and increasing. Still, they are setting up for a big rally whenever rates settle down.