Housing stocks recoup losses after Trump related sell-off
Shares in homebuilders turned higher on Thursday and rental housing Real Estate Investment trusts (REITs) regained some lost ground after U.S. President Donald Trump said on Wednesday his administration is moving to ban Wall Street firms from buying up single-family homes in a bid to reduce home prices
Trump's plan was seen as a potential blow for private-equity landlords that also pressured homebuilders as well as REITs that focus on single family rental homes. Companies such as private equity investor Blackstone BX.N, American Homes 4 Rent AMH.N and Invitation Homes INVH.N have bought thousands of single-family homes since the 2008 financial crisis led to a wave of home foreclosures.
BX up 1.3% at $155.60 on Thursday, after closing Wednesday's session down 5.6% at $153.59 following a session low of $147.52
AMH up ~2% at $31.63 on Thursday, after closing down 4.3% at $31.01 on Wednesday following a session low of $28.84, which was its lowest level since March 2023
INVH up 0.8% at $26.63 on Thursday, after closing down 6% at $26.41 on Wednesday's session during which it hit a low of $25.29, which was its lowest level since late May 2020
The PHLX Housing index .HGX, which includes homebuilders and building materials companies, was rallying 3.4% on Thursday, on track to erase the previous session's losses. It had closed 2.6% lower on Wednesday
UBS analysts wrote they "expect minimal impact from potential ban", noting the publicly traded homebuilders they cover "sell the vast majority of their homes to consumers, with minimal interaction on the institutional side".
On average, they estimate that most homebuilders it covers have low- to mid-single digit percentage unit sale exposure to institutional investors and noted "bulk sales to institutions typically generate lower margins for the builders"
In its research, UBS references investor-owned housing stats from DR Horton DHI.N, up 4.2% on Thursday, Lennar LEN.N, up 5%, Meritage Homes MTH.N, up 3.4%, PulteGroup PHM.N, up 4.5%, and Toll Brothers TOL.N, up 1.7%
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