Core Insights - U.S. existing home sales saw a modest increase of 0.5% in November, reaching a seasonally adjusted annual rate of 4.13 million units, although this was below economists' expectations of 4.15 million units [10] - The housing market continues to face significant challenges, including a sluggish labor market and high prices, which are limiting consumer confidence and demand [10][6] Sales Performance - Home sales surged by 4.1% in the Northeast and increased by 1.1% in the South, while the Midwest experienced a decline of 2.0%, and sales in the West remained unchanged [10] - Year-over-year, home sales declined by 1.0% in November [3] Mortgage Rates and Economic Conditions - The average rate for a 30-year fixed mortgage dropped from 7.04% in mid-January to 6.19% by the end of November, but has since stabilized around 6.21% [4][10] - The unemployment rate rose to 4.6% in November, the highest in over four years, and annual wage growth is at its slowest since May 2021, contributing to economic uncertainty [4][10] Inventory and Pricing - The inventory of existing homes fell by 5.9% to 1.430 million units in November, the lowest level since March, although it was up 7.5% from a year ago [7][10] - The median existing home price increased by 1.2% year-over-year to $409,200, while the median days on the market rose to 36 from 32 [8][10] Market Dynamics - All-cash sales accounted for 27% of transactions, up from 25% a year ago, indicating a shift in buyer behavior [9][10] - First-time buyers represented 30% of sales, unchanged from the previous year, with a target of 40% needed for a robust housing market [10]

Investment Rating - The report assigns a "Buy" rating to several companies, including D.R. Horton Inc. (Buy, $124.93), Installed Building Products Inc. (Buy, $161.63), Meritage Homes Corp. (Buy, $67.87), and TopBuild Corp. (Buy, $295.50) [42]. Core Insights - The housing market activity scale remains flat at 4 for the week of May 11, which is 16% below the long-term average and down 7% year over year [5][10]. - New construction is expected to maintain a relative advantage over repair and remodel (R&R) activities, with building product companies like IBP and BLD being well-positioned [3]. - Spec-focused homebuilders such as MTH and DHI are viewed positively [3]. Summary by Sections Housing Market Activity - The index held at 4, indicating mixed indicators with a 2% increase in purchase applications and a 3% gain in home sales compared to the previous week [5][11]. - The 30-year mortgage rate increased by 5 basis points to 6.81%, contributing to the uncertainty in the housing market [24]. Market Dynamics - Active listings increased by 14% year over year, although they remain 14% below the 2019 average [15]. - The median sale price rose by 2% year over year, while 40% of homes were off the market within two weeks, an increase from 37% in the same week of 2019 [15][21]. Mortgage Market Update - Total mortgage applications rose by 27% year over year, with purchase applications up 18% year over year [33]. - Refinancing applications increased by 44% year over year, indicating a robust refinancing market despite the rising mortgage rates [24][35].