We recently published 10 Stock Market News You Shouldn’t Miss as Tom Lee Reiterates Bullish Market Outlook Amid AI Catalysts. DR Horton Inc (NYSE:DHI) is one of the stock news that you should not miss.
Stephen Kim, head of housing research at Evercore ISI, explained in a recent show on CNBC why he downgraded several housing stocks, including DR Horton Inc (NYSE:DHI). The analyst said the US government’s reasoning on the housing issue could negatively impact builders. He said that at the moment there is no supply problem.
“A big part of our downgrade was our realization that the administration was going to aggressively pursue supply-side solutions to affordability, which is really the worst thing builders could hear. FHFA Director William Pulte has been very clear and increasingly clear in his tweets and interviews about what he’s looking for. The administration seems to believe we have a national housing deficit because we don’t build enough homes. The deficit is the reason why home prices are so high and housing has become unaffordable. Higher home prices are also contributing to inflation because the housing component of the CPI is high. They look at builders and say they are deliberately building fewer houses than they could. They are posting strong profitability and cash flow and are buying back shares. They say that if builders could produce more homes at lower prices, affordability for buyers would improve, inflation would improve, employment would improve, and new home prices could fall, even without dragging down existing home prices. which, by the way, has been happening. There’s a lot of truth in what they say, but it overlooks something vitally important, which I think builders are really hoping to recognize: We have a demand problem right now. We actually don’t currently have a supply problem. Yes The builders would have built a lot more three or four years ago, it would have been different, but today you slam the door when the horses have already left the stable. We don’t have enough demand, so having management focus “The issue of supply-side solutions instead of mortgage spreads is a problem and is unfortunate for builders.”
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Heartland Mid Cap Value Fund stated the following regarding DR Horton, Inc. (NYSE:DHI) in its Letter to investors for the third quarter of 2025:
“Consumer discretionary. Our best performing share in the quarter, DR Horton, Inc. (NYSE:DHI), came from our Deep Value group. DHI, the country’s largest homebuilder, enjoys around 10% market share with scale advantages in a highly fragmented industry.