​D.R. Horton, Inc. (NYSE:DHI) is one of the Undervalued Cyclical Stocks to Invest In. Wall Street is cautious on D.R. Horton, Inc. (NYSE:DHI). Recently, on January 9, Michael Dahl from RBC Capital reiterated a Sell rating on the stock and lowered the price target from $118 to $117. Earlier on January 7, Citizens downgraded the stock from Market Outperform to Market Perform, without disclosing any price targets. ​Analysts at RBC Capital noted that they kept an Underperform rating on the stock because of t ...

Core Viewpoint - President Trump's proposals to lower mortgage rates and cap credit card interest rates may not effectively improve affordability for consumers and could potentially lead to adverse economic consequences [1][2]. Mortgage Rates - Trump plans to direct representatives to purchase $200 billion of mortgage bonds to lower mortgage rates [2]. - Following the announcement, fixed mortgage rates have decreased by 10 to 20 basis points, which could increase housing demand but also drive home prices up due to a severe housing shortage [6][7]. - The economist Mark Zandi warns that while lower rates may seem beneficial, they will not make homebuying more affordable as higher demand will lead to increased home prices [7]. Credit Card Interest Rates - Trump's proposal includes capping credit card interest rates at 10% for one year, which Zandi believes may face legal challenges and could limit credit availability for many borrowers [9]. - Zandi argues that only consumers with high credit scores would maintain their credit lines, as lenders would struggle to profitably extend credit at the proposed rate [9]. - Analysts at UBS and hedge fund manager Bill Ackman share concerns that capping credit card interest rates could negatively impact lower-income consumers and overall economic spending [10].

Core Insights - President Trump's initiative aims to prohibit large investment companies from purchasing single-family homes to improve affordability for families [1][2] - Experts express skepticism about the effectiveness of this proposal in addressing the housing affordability crisis, emphasizing that the issue is fundamentally a supply problem [11][12] Group 1: Institutional Investors and Market Dynamics - Institutional investors have been linked to rising home prices and rents, but their overall impact on homeownership opportunities remains unclear [3] - Investor activity in the single-family home market increased from 29% in June 2025 to 30% in September 2025, marking a year-over-year rise of three percentage points [3][4] - Over 90% of investor-owned single-family homes are held by small investors with fewer than 11 properties, indicating that large institutional buyers are not the primary drivers of the market [5][6] Group 2: Local Regulations and Construction Challenges - Local building restrictions have significantly contributed to the housing shortage, with research indicating a decline in construction since the 1980s due to restrictive zoning and permitting laws [7][8] - Regulatory burdens account for approximately 25% of the cost of a single-family home, equating to about $100,000 of a $400,000 house [10] Group 3: Potential Impact of Trump's Proposal - Reducing institutional investment could exert downward pressure on home prices by decreasing demand, but institutional investors only represent about 1% to 2% of total home purchases, suggesting a modest overall impact [10] - Limiting institutional activity may lead to a reduction in the single-family rental market supply, potentially increasing rental prices [10] Group 4: Broader Housing Affordability Solutions - Experts agree that addressing the housing shortage requires multiple solutions beyond just restricting institutional investors, as the affordability crisis is deeply rooted in supply issues [11][12] - The combination of regulatory burdens, land use policies, and economic factors creates a "perfect storm" that drives housing prices higher [12]

Core Viewpoint - Rocket Companies (RKT) is experiencing significant stock price appreciation due to expectations of lower mortgage rates following President Trump's announcement to purchase $200 billion in mortgage bonds, aimed at making homebuying more affordable [1][5]. Group 1: Company Overview - Rocket Companies is valued at $49 billion and operates popular personal finance brands including Rocket Mortgage, Rocket Loans, and Rocket Homes [1]. - The stock has gained over 125% in the past year and 25% in the last month, reaching a new three-year high of $23.50 [5][4]. Group 2: Market Reaction - Following the announcement of the mortgage bond purchase, Rocket shares have surged as investors anticipate increased home purchases and loan activity due to lower rates [2]. - The stock has received a 100% "Buy" opinion from Barchart, indicating strong market confidence [5]. Group 3: Technical Indicators - Rocket Companies has shown consistent price appreciation, with a recent gain of 17.43% since a new "Buy" signal was issued on November 26 [3]. - The Relative Strength Index (RSI) is currently at 76.43, indicating strong momentum, with a technical support level around $22.71 [7].

Core Viewpoint - The rising cost of housing in the U.S. has become a significant issue, with home prices increasing over 150% since 2019 and mortgage rates rising from approximately 3.7% to 6.2%, making home ownership unattainable for many Americans, particularly first-time buyers [2][3] Group 1: Housing Affordability Crisis - The affordability crisis is primarily driven by skyrocketing home prices and increasing mortgage rates, which have made home ownership an aspiration for three in four U.S. households [2][3] - President Trump has proposed banning institutional investors from purchasing single-family homes, which he believes are driving up prices and making home ownership less accessible [3][4] - The initiative has garnered bipartisan support, with various political figures acknowledging the negative impact of treating housing as a corporate strategy [3][4] Group 2: Institutional Investors' Role - Critics argue that institutional investors are reducing the inventory of homes available for sale, thereby driving up prices for regular buyers [4][5] - However, experts like Ed Pinto contend that institutional buyers are not the cause of rising prices but rather a symptom of deeper issues, such as restrictive zoning laws and a lack of new construction [5][14] - Institutional investors have historically played a role in stabilizing the housing market during downturns, such as the Great Financial Crisis and the post-pandemic recovery [7][13] Group 3: Market Dynamics and Misconceptions - Data shows that institutional investors account for only 1% of the total single-family housing stock, with small, mom-and-pop businesses dominating the market [9][14] - Recent trends indicate that large institutional investors have been net sellers rather than net buyers, contradicting claims that they are monopolizing the market [10][13] - Pinto's research highlights that there is no correlation between institutional ownership levels and housing price increases in various markets, suggesting that other factors are at play [13][14] Group 4: Potential Consequences of Policy Changes - Banning institutional investors from acquiring homes could have unintended negative consequences, such as reducing the availability of rental options for low-income families and hindering the repair and renovation of distressed properties [15] - The absence of institutional investors during economic downturns could exacerbate housing market volatility and limit options for aspiring homebuyers [15]

Core Viewpoint - Builders FirstSource (BLDR) shares experienced a significant rally of 12% in the last trading session, closing at $124.66, driven by notable trading volume and investor optimism regarding housing affordability in the U.S. [1][2] Company Performance - Builders FirstSource is projected to report quarterly earnings of $1.31 per share, reflecting a year-over-year decline of 43.3%. Revenue expectations stand at $3.44 billion, which is a decrease of 9.9% compared to the same quarter last year [3]. - The consensus EPS estimate for Builders FirstSource has remained unchanged over the past 30 days, indicating a lack of upward revisions in earnings estimates, which typically correlates with stock price movements [4]. Industry Context - Builders FirstSource operates within the Zacks Building Products - Retail industry, which includes other companies such as Tecnoglass (TGLS). Tecnoglass closed the last trading session up by 4.9% at $53.73, although it has returned -4.2% over the past month [5]. - Tecnoglass is expected to report an EPS of $0.86, representing an 18.1% decline from the previous year, and currently holds a Zacks Rank of 5 (Strong Sell) [6].

Core Viewpoint - Century Communities (CCS) shares experienced a significant rally of 10.9%, closing at $68.33, driven by notable trading volume and renewed optimism regarding housing affordability in the U.S. [1][2] Company Performance - CCS is projected to report quarterly earnings of $1.39 per share, reflecting a year-over-year decline of 60.2%, with expected revenues of $1.07 billion, down 16.2% from the previous year [3] - The consensus EPS estimate for CCS has remained unchanged over the last 30 days, indicating a lack of upward revisions which typically correlate with stock price movements [4] Industry Context - CCS operates within the Zacks Building Products - Home Builders industry, where another company, Meritage Homes (MTH), also saw a significant increase of 10.4% in its stock price, closing at $75.45 [5] - Meritage is expected to report an EPS of $1.57, which represents a 66.7% decline from the previous year, and currently holds a Zacks Rank of 4 (Sell) [6]

Group 1 - TopBuild (BLD) shares increased by 5.6% to close at $465.73, supported by higher trading volume compared to normal sessions, contrasting with a 0.7% loss over the past four weeks [1] - The stock's rise is attributed to optimism regarding housing affordability improvements in the U.S., following a meeting between U.S. Commerce Secretary Howard Lutnick and major homebuilding executives, highlighting the administration's efforts to address housing concerns [2] - TopBuild, as an installer and distributor of insulation and building products, is closely linked to new housing starts and renovation volumes, which is expected to positively influence investor sentiment and stock performance [2] Group 2 - TopBuild is projected to report quarterly earnings of $4.36 per share, reflecting a year-over-year decline of 15%, while revenues are anticipated to reach $1.48 billion, marking a 12.9% increase from the previous year [3] - The consensus EPS estimate for TopBuild has remained stable over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] - TopBuild holds a Zacks Rank of 3 (Hold), while another company in the same industry, Crawford & Company B, has a Zacks Rank of 4 (Sell) [5]

Core Insights - The housing market is facing a significant supply issue, with Federal Reserve Chair Jerome Powell highlighting the ongoing shortage of housing and the challenges in zoning land in desirable areas [1] - Institutional investors have played a notable role in the housing market, owning 3.4% of U.S. single-family homes, with larger players holding a smaller percentage [2] - The surge in institutional buyers from 2006 to 2014 contributed to a 58% increase in real house price growth and a 75% decline in homeownership rates [1] Market Reactions - The announcement regarding institutional investors' activities led to a decline in shares of major firms, including Blackstone, which fell by 5.6%, and single-family rental REITs like American Homes 4 Rent and Invitation Homes, which dropped by 4.3% and 6.0% respectively [3] Policy Implications - Former President Trump has proposed banning large institutional investors from purchasing single-family homes, citing the impact on affordability and the American Dream for younger Americans [4] - A Zillow report estimates a shortage of 4.7 million homes in the U.S., exacerbating the housing affordability crisis [5] Investment Opportunities - Despite challenges, real estate remains an attractive long-term investment for both institutional and ordinary investors, providing passive income and a hedge against inflation [6] - New crowdfunding platforms allow everyday Americans to invest in real estate with minimal capital, enabling access to income-generating properties without the burdens of traditional ownership [7][9] - Platforms like Homeshares and Lightstone DIRECT offer accredited investors opportunities to invest in diversified real estate portfolios with varying minimum investments [20][15]

Core Viewpoint - Federal Reserve officials express skepticism regarding the effectiveness of the Trump administration's plan to lower housing costs through the purchase of mortgage-backed bonds, emphasizing that housing affordability is more significantly impacted by the supply of homes available for purchase rather than just financing costs [1][5]. Group 1: Federal Reserve Officials' Perspectives - Atlanta Fed President Raphael Bostic highlights that housing affordability challenges extend beyond financing, pointing to persistent supply and demand issues in major markets [2][3]. - Bostic, with a background as a housing economist, stresses the importance of addressing multiple factors to ensure families can purchase homes [3]. - Richmond Fed President Thomas Barkin supports the notion that improving housing affordability requires addressing supply-side issues, suggesting that while bond purchases could impact mortgage rates, they may not significantly enhance affordability [3][4]. Group 2: Trump Administration's Housing Plan - President Donald Trump's announcement includes a plan to utilize funds from government-sponsored housing lenders to buy $200 billion in mortgage bonds, aimed at reducing elevated borrowing costs for homes [5]. - The Federal Housing Finance Agency Director Bill Pulte confirms that the buying initiative has commenced with $3 billion in purchases, although the timeline for the full scope of purchases remains unspecified [6].