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PulteGroup shares tipped as top pick amid rising mortgage rates

Published Oct 12, 2023 21:56
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In light of increasing mortgage loan rates, Oppenheimer & Co. analysts have recommended investment in shares of major home builders and exchange-traded funds (ETFs) on Thursday. The analysts suggest that larger builders such as D.R. Horton Inc., Lennar Corp (NYSE:LEN)., NVR (NYSE:NVR) Inc., PulteGroup Inc (NYSE:PHM)., Toll Brothers (NYSE:TOL) Inc., and Tri Pointe (NYSE:TPH) Homes Inc. are poised to benefit due to their ability to offer mortgage incentives in a challenging market.

The Mortgage Bankers Association has reported a rise in mortgage loan rates, which has led to a growing demand for new homes from these large-scale builders. In addition, industry suppliers like Builders FirstSource Inc., Floor & Decor Holdings (NYSE:FND) Inc., Home Depot Inc (NYSE:HD)., and Lowe’s (NYSE:LOW) Cos. Inc., have seen an expansion in their market share.

Data from FactSet shows that the top ten U.S. builders held a 42.6% share in 2022. Among the recommended ETFs are iShares U.S. Home Construction ETF ITB and SPDR S&P Homebuilders (NYSE:XHB) ETF XHB, which provide exposure to these leading companies.

PulteGroup has been singled out by the analysts as their "top pick in the space," with a set price target of $110. This advice comes as these major builders continue to leverage mortgage incentives to attract buyers amidst the climbing loan rates.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

PulteGroup shares tipped as top pick amid rising mortgage rates
 

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