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In July, housing starts declined 6% from the prior month for both single-family and multifamily projects. Supply constraints and elevated input costs are the major factors that led to the slump in the housing industry. According to senior economist George Ratiu at Realtor.com, “Builders pulled back on housing starts, wary of overcommitting on final new home prices in the face of volatile costs for land, materials and labor.”
So we think given the current volatility in the housing market, fundamentally weak stocks PulteGroup, Inc. (PHM), KB Home (KBH), and Meritage Homes Corporation (MTH) are best avoided now.
