The housing market is about to tank, which hurts homebuilders such as PulteGroup and KB Home. Recent results show net income down 75%, gross margins down 25% and operating margins down 75%, with major discounts needed to clear inventory. Builders citing higher land costs while still buying land at inflated values to build zero-margin homes is bankruptcy writing on the wall. x.com 

KB Home shows the housing recession is continuing: even with average selling prices down 5% year over year, deliveries fell 23%. Per @aviancapital, housing revenue fell 27% and backlog value 7%. x.com 

Toll Brothers is priced like an old-school cyclical homebuilder despite becoming an increasingly capital-efficient luxury brand with strong earnings growth. It trades at 10.5x earnings versus a historical norm of about 17.5x. EPS has compounded 18.8% a year since 2016, consensus sees 9% growth in 2027 and 15% in 2028, and dividends have compounded 17.6% since 2017. It is more asset-light, with 57% of controlled lots optioned versus 38% in 2019. x.com 

Homebuilder stocks could fall close to 80% even if home prices drop only 30-40%, so the two shouldn't be compared directly. Real estate could be in for a rough couple of years. x.com 

US homebuilders remain a place to avoid as Fed Chair Warsh's rate hike lands on an already weak housing market. Lennar reported orders down 9%, incentives running at 12% of the sale price and mortgage rates near 6.8%. x.com 

Homebuilder stocks are priced for a soft landing that the inventory data doesn't support. New home supply hit 10.3 months, the highest since February 2009, against a long-term median of about 6, after jumping a full month in May. In 6 of the 7 times it reached this level since the 1970s, the US was already in recession. Mortgage rates and record ownership costs keep buyers out, and when builders cut prices hard to clear supply, margins will take the hit and the sector will reprice. x.com  x.com 

US homebuilders are a dead sector until mortgage rates come down. The homebuilder ETF broke down out of a Darvas box as rates drag the group lower, and AI-driven layoffs on the scale of a million people would hurt the housing market further. @great_martis sees global fixed mortgage rates, around the mid-6% range in the US, set to surge toward 8%, pressuring affordability. x.com  x.com 

Homebuilders and retailers are suffering because housing liquidity has crashed, so people stay and remodel rather than move. Many stocks, from oil to homebuilders to public storage, depend on this mobility trade, and seller-to-buyer spreads are at historic levels. Per @jonbrooks, transaction volume sits near record lows. Rising HELOC use may also signal falling disposable income. x.com 

Ugly housing conditions provide the contrarian sentiment for a major homebuilder bull run over the next 12 months. Bears investing through the rearview mirror are going to be proven wrong. x.com 

As the AI infrastructure crash takes form, its recessionary effect suppresses bond issuance and powerfully caps yields, giving battered housing, mortgage and related stocks a lift. Starwood Property Trust, Rocket Companies and Builders FirstSource should get a powerful boost as yields fall, with huge short covering and fundamental improvement; many in the group trade well below book value. x.com  x.com  x.com