patrick.net

https://www.marketwatch.com/story/d-r-hortons-stock-dives-as-lower-prices-for-new-homes-hurt-profits-48596483

D.R. Horton’s stock dives as lower prices for new homes hurt profits

The stock DHI, -9.09% tumbled 9.6% toward a six-week low in midday trading, which puts it on track to suffer the biggest one-day drop since the record 20.2% plunge on March 16, 2020. The selloff comes a day after the stock had closed at a record $157.70.

35:31: “…21% of the mortgage market (being delinquent) is way over the delinquency we were in late 2006.”

Well worth a listen in its entirety.

https://www.youtube.com/watch?v=WL2ZRP84T7Y&%3B%3Bt=3725s

zzyzzx says

D.R. Horton’s stock dives as lower prices for new homes hurt profits

good tell tale as far as economy

.

gabbar says

There never was a free market, there won't be one in the future. Everything is rigged and manipulated.

See around 1800-1810 for a good example of a free market. USA of course

zzyzzx says

Thank god I’m not an agent, and I don’t have rent to pay. Thank god for my wife who has been taking care of me all these years. 😅

https://x.com/charliebilello/status/1749795840061764055?s=46&t=5lEEPaezr6Ic-W4Z6huZ5Q

GNL says

Do you give a damn about your progeny? If I remember correctly, you are an immigrant. Maybe that's why you think the way you do. You aren't a real American. That isn't a knock on you, I'm just making an observation.

I'd counter he IS an American (naturalized) and like lots of risk taking American's we had in the past. Old School...

Beyond that I worked with people from all over the world and in my experience in the bay area Vietnamese are the most patriotic Americans (as a group).

Image for this thread is broken.

@AD

.
Yahoo Finance no longer has this April 2022 article. Marketwatch still has it actively published. See below excerpts from Marketwatch.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
.
Mark Kiesel is thinking of selling his California home and becoming a renter. Families looking to buy a home make want to take heed.

Kiesel, who serves as global credit chief investment officer at Pimco, warned in an interview with Bloomberg that his “long-term 25-year charts” that guide his decisions to buy and sell real estate are “flashing orange right now.”

‘I think we’re in the final innings.’

— Pimco’s Mark Kiesel on the housing market’s strength
Kiesel notably called a top to the last housing bubble, selling his home in Newport Beach in May 2006. At the time, he called the housing market “the next Nasdaq bubble.” He waited until May 2012 to buy a home again, just home prices hit their nadir.

According to Bloomberg, he purchased his home in Orange County for $2.9 million back then. Today, its value is estimated to be around $5.5 million, according to Redfin RDFN, -0.94%.

Kiesel suggested that buying a home today wouldn’t net more than a 2% return; he didn’t indicate over what time period he thought that return would happen. “I can find other things I can make money on other than a house,” Kiesel said.

Kiesel’s stance differs from that of the company he works for. In a March note, Pimco analysts argued that the current housing cycle is different from the last one, because the broader housing industry was so heavily scarred by the last crash. “U.S. housing should remain supported over the long term by two pillars: a secular shortage of housing units and resilient, delevered borrowers,” they wrote.

Instead of a housing bust, Pimco analysts expect that home-price growth will slow in response to affordability challenges and rising interest rates. The average rate on the 30-year fixed-rate mortgage was 5.1% as of Thursday, close to a 12-year high, according to Freddie Mac FMCC, 7.89%. In time, the Pimco analysts anticipate that the low supply of homes for sale will recover, providing buyers with more options and creating a more balanced market.

Pimco’s view is shared by many other economists who would argue that stronger lending standards prevent against the type of behavior that contributed to the last crash. But some analysts are bearish on the market. Ian Shepherdson, chief economist at Pantheon Macroeconomics, suggested Wednesday that home sales could drop by more than 20% in the coming months, and fall even lower still.

.



.

zzyzzx says

This is true.

House prices, which are mostly land prices, cannot rise forever. Eventually there will be a revolt, or just demographic devastation as young couples find they simply cannot afford to have children because they have nowhere to live.

The solution is Georgism, the single tax on land values and no tax on anything else, especially not income or sales.

Patrick says

The solution is Georgism, the single tax on land values and no tax on anything else, especially not income or sales.

The only result I can come up with is hoarding of land would most likely end. It would cost too much to keep it unused.

Patrick says

The solution is Georgism, the single tax on land values and no tax on anything else, especially not income or sales.

That won't solve the government impediments on construction.

Patrick says

zzyzzx says

This is true.

House prices, which are mostly land prices, cannot rise forever. Eventually there will be a revolt, or just demographic devastation as young couples find they simply cannot afford to have children because they have nowhere to live.

The solution is Georgism, the single tax on land values and no tax on anything else, especially not income or sales.

it’s actually illegals and h#bs. housing is supply demand issue… kinda a problem when millions of illegals are entering. and jobs going to foreigners fucks americans out of jobs and opportunities. fox that and you fox america

.

Invitation Homes down about 27% from all time high, and DR Horton down about 12% from all time high.

****************
https://www.newsweek.com/housing-market-warning-sign-peter-schiff-low-sales-renting-trend-1863653

As the U.S. housing market grapples with its lowest sales since the mid-1990s, economist Peter Schiff warns of a looming crisis in which homeowners are resorting to renting their properties to retain their existing mortgage in what he calls a deteriorating economy.

With the National Association of Realtors (NAR) reporting a slump in existing home sales and a surge in median sales prices last week, Schiff, on his The Peter Schiff Show podcast, pointed to a potential trend in the real estate market in which homeowners will begin renting out their homes to retain the properties on which they have low mortgage rates versus selling on the open market, which would cause them to take on a new mortgage with a higher interest rate.

AD says

homeowners will begin renting out their homes to retain the properties on which they have low mortgage rates

Renting out a house financed with a homebuyer mortgage used to trigger a balance due clause on that mortgage. Has that changed?

HeadSet says

AD says

homeowners will begin renting out their homes to retain the properties on which they have low mortgage rates

Renting out a house financed with a homebuyer mortgage used to trigger a balance due clause on that mortgage. Has that changed?

How would they find out?

HeadSet says

Renting out a house financed with a homebuyer mortgage used to trigger a balance due clause on that mortgage. Has that changed?

Veteran Affairs allows renting as long as the owner lived in the home such as for a year.

...

AD says

With the National Association of Realtors (NAR) reporting a slump in existing home sales and a surge in median sales prices last week, Schiff, on his The Peter Schiff Show podcast, pointed to a potential trend in the real estate market in which homeowners will begin renting out their homes to retain the properties on which they have low mortgage rates versus selling on the open market, which would cause them to take on a new mortgage with a higher interest rate.

Once the inevitable demographic shift begins - the Boomers becoming infirm or dead due to old age and the need to downsize or have the kids that live several states away inherit - the rental stuff will stop working.

new housing does not necessarily mean correctly built

https://www.wfaa.com/article/news/local/dfw-home-inspector-concerned-about-fast-new-construction/287-47695769-4e06-4c11-9a8b-3c39e4dcbd42

AmericanKulak says

Once the inevitable demographic shift begins - the Boomers becoming infirm or dead due to old age and the need to downsize or have the kids that live several states away inherit - the rental stuff will stop working.

will have to see how this fares as maybe that is my housing starts still remain low compared to 2000 to 2007 ... new homes not going up in states like Illinois, New York and California as much as in Texas and Florida ... a lot of Florida housing like townhomes meant to only last 99 years

this applies to townhomes as well: http://hoa-condoblog.com/EGBlog020121.html

so home supply will be managed to match demand and demographic forecasts

.....

GNL says

How would they find out?

And: Why would they give a shit? As long as you meet their payments.

AD says

HeadSet says

Renting out a house financed with a homebuyer mortgage used to trigger a balance due clause on that mortgage. Has that changed?

Veteran Affairs allows renting as long as the owner lived in the home such as for a year.

...

Currently in Montana at my buddies house who is a vet. He had a house he ended up renting out for years. He lived in it for a couple years. It’s for sure doable. But not my realm of experience.

You want the RE stats? Melody’s got’em.

https://www.youtube.com/watch?v=3sskye2Nskc

Al_Sharpton_for_President says

RE stats? Melody’s got’em.

.

Yeah Melody Wright from Housing Wire and her Youtube channel is insightful. I like also Calculated Risk Blog going back to Doris "Tanta" Dungey.

From Housing Wire's website: https://altos.re/r/cecb9e8e-0429-450c-9d55-2a740944b758?data=price_median&segments=true

Slight advantage to home sellers right now as it was last month

.

https://wolfstreet.com/2024/01/25/prices-of-new-houses-drop-to-2-year-low/

UkraineIsFucked says

https://wolfstreet.com/2024/01/25/prices-of-new-houses-drop-to-2-year-low/

How can this be true when I keep seeing analysts saying prices are increasing?

GNL says

UkraineIsFucked says

https://wolfstreet.com/2024/01/25/prices-of-new-houses-drop-to-2-year-low/

How can this be true when I keep seeing analysts saying prices are increasing?

It is because these are the prices for "NEW" homes. You see builders are using inferior products compared to what they were using a few years ago, having smaller lot sizes and giving less choices for upgrades. The houses are smaller overall as well.

For "EXISTING" homes, those prices have been going up even after taking into account upgrades, etc.

My bad, I didn't see the word "new".

i think it’ll go back up, they are lowering rates so that debt slave lemmings can get into 30 year shackles again.

NuttBoxer says

$506B went into some people’s pockets. 🚀🚀

Jan 23 (Reuters) - D.R. Horton Inc (DHI.N), opens new tab missed estimates for its first-quarter profit on Tuesday, as it offered higher incentives and cut base price on new homes to spur demand lagging due to higher mortgage rates, sending the U.S. homebuilder's shares down 8.5%.

Among a string of incentives offered by U.S. homebuilders, mortgage rate buydowns - a permanent or temporary interest rate reduction on a home loan - have become popular among customers looking to buy new homes.

The buydowns are, however, adding pressure on the industry's gross margins and offsetting homebuilders' gains from higher sales. D.R. Horton saw roughly 70% of its buyers utilize rate buydowns, up about 10% sequentially.

It expects second-quarter gross margins to remain flat in the range of 22.6% to 23.1%, as near-term incentive levels remain elevated due to "continued affordability challenges," the company said on a post-earnings call with analysts.

https://www.reuters.com/markets/us/us-homebuiler-dr-horton-raises-full-year-home-sales-forecast-2024-01-23/

22.6-23.1% profit margin on new construction is solid.

At this point, take the cash and apply it to the down payment. No point of buying down rates. The Fed’s dot plot projects at least 3 cuts this year and a few more cuts next year while WallStreet expects 5-6 rate cuts this year. That’s what I would do if I were in the market for a new house.

Al_Sharpton_for_President says

D.R. Horton Inc (DHI.N)

Just looking at the steady growth in equity and in revenue for DR Horton makes it seem like a safe long term hold, especially since its PE is 10.
.



.

FortwayeAsFuckJoeBiden says

debt slave lemmings can get into 30 year shackles again.

Those 30 year shackles make the sweet sounds of freedom.

Al_Sharpton_for_President says

You want the RE stats? Melody’s got’em.

https://www.youtube.com/watch?v=3sskye2Nskc

Surprising she only has 10k subscribers. She’s right on 2 points. The job market is not as rosy as the reported number shown it to be especially for the Bay Area. Second, it’s not that rent is “dropping”, but it’s stopped accelerating. Housing will come into balance at 5% mortgage rate….in line with what AD has been predicting

Still watching to the rest

She thinks consumers will get tapped out in 2025. I’m shocked that they’re not tapped out at the moment. Everything is expensive. Tips are getting out of control.

I recently spent $40 for 2 sandwiches at a simple takeout sandwich shop in McLean Virginia. Yesterday, I stopped in Arlington Virginia for a slice of pizza ($6 +tip) and saw that 1 steak and cheese sub was $26 +tip.