Best Homebuilding Stocks

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Best Homebuilding Stocks

Two Best Homebuilding Stocks To Buy

The homebuilding shortage is no longer a myth but a reality that continues to haunt the USA. It is now clear that there is a shortage of homes, and builders cannot keep up with demand.

Now that the Fed is lowering the rates, the mortgage rates will also fall. This will lead to a bullish trend in the housing stocks as more people will look to buy a house.

The math is very simple as there are few homes but too many buyers, which has driven up the prices. So, there's a lot of room for growth for the US homebuilders to correct this market imbalance.

LGI Homes

The first stock in our list is LGI Homes, which is a growing regional firm from Texas. They mostly focus on the 1st time home buyers and have a presence in 21 US states.

A quick look at homebuilding stocks shows that most of them are expected to show sales growth in single digits. However, LGI Homes is an exception as it is expecting sales growth of 11% this year.

For the next year, the analysts think LGI Homes can easily manage 6% growth, while the sales will be near $2 billion by the end of 2027.

D.R. Horton

Another good homebuilding stock is D.R. Horton, which has a presence in 36 US states. The last year's data showed D.R. Horton made sales worth $34.3 billion and even outpaced the LGI Homes by 17 times.

So, if you want a stock that's bigger, then the D.R. Horton stock can be a good option. In fact, the largest homebuilders in the US are D.R. Horton, which is enough to make it a must-buy.

However, the sheer scale of D.R. Horton means it will only manage to grow sales in the single digits. But, that's okay as the volume of the sales will be way higher than most other homebuilding stocks.

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