Core Viewpoint - LGI Homes, Inc. is recognized as one of the best housing stocks to buy according to hedge funds, with a recent price target increase from Citizens JMP to $85 from $75, maintaining an "Outperform" rating [1][2] Financial Performance - In Q2 2025, LGI Homes delivered 1,323 homes at an average sales price of $365,446, resulting in $483.5 million in revenue [1] - The gross margin and adjusted gross margin increased by 190 basis points sequentially to 22.9% and 25.5%, respectively [2] - In Q3 2024, home sales revenue rose due to an increase in the average sales price to $371,000, up 5.2% year-over-year, with home closings totaling 1,757 homes, flat compared to the prior year but up 6% sequentially [3] Strategic Focus - The company is focusing on cost savings and improved efficiency while aiming to enhance profit margins and earnings per share (EPS) [2] - LGI Homes has reduced its expected closings for fiscal year 2024 to a range of 6,100-6,400 homes from an initial range of 7,000-8,000 homes, while raising gross margin expectations [3] - The company is prioritizing margins over volume amid a U.S. housing shortage estimated at two-to-four million homes, having spent the last two years building its inventory of developed lots and raw land [3] Market Outlook - LGI Homes remains confident in the long-term outlook of the broader housing market, supported by healthy demographics and a structural shortage of new homes [2] - The active community count grew by 30% year-over-year and 8% sequentially to 138, positioning the company to meet its year-end target of 150 active communities and significantly increase home closings in FY 2025 [3]

Group 1 - KB Home (NYSE:KBH) is recognized as one of the best housing stocks to buy according to hedge funds, with Oppenheimer initiating coverage with a "Perform" rating and no price target [1] - The company's land strategy is viewed positively, and its build-to-order model is believed to have long-term advantages, although its market footprint and new pricing approach present challenges in the current market [1][2] - In Q2 2025, KB Home reported revenues of $1.53 billion, a decrease from $1.71 billion in the previous period, while the average selling price increased slightly to $488,700 [1] Group 2 - KB Home is scaling back land acquisition and development investments while increasing share repurchases, reflecting a strategic shift in response to the current market environment [2] - In Q2 2025, the company repurchased $200 million of its outstanding common stock at an average price of approximately $54 per share [2]

Group 1 - PulteGroup, Inc. is recognized as one of the best housing stocks to buy according to hedge funds, with Wells Fargo raising the price target from $135 to $150 while maintaining an "Overweight" rating [1] - The company reported strong financial results for Q2 2025, achieving earnings of $3.03 per share and closing 7,639 homes, with gross and operating margins of 27.0% and 17.9% respectively [2] - At the end of Q2 2025, PulteGroup's backlog consisted of 10,779 homes valued at $6.8 billion, indicating robust demand and operational efficiency [2] Group 2 - Wells Fargo's adjustment of price targets reflects a broader optimism among investors regarding interest rates and a re-rating of stocks in the homebuilding sector [1] - The disciplined business practices of PulteGroup have allowed it to successfully navigate a highly competitive homebuilding environment [2]

Core Insights - Lennar Corporation is set to release its third-quarter earnings results on September 18, with expected earnings of $2.09 per share, down from $3.90 per share in the same period last year [1] - The company anticipates quarterly revenue of $9.05 billion, a decrease from $9.42 billion year-over-year [1] Management Changes - On August 4, Lennar announced the retirement of general counsel Mark Sustana and COO Fred Rothman, appointing Katherine Lee Martin as the new chief legal officer [2] Stock Performance - Lennar shares experienced a slight decline of 0.3%, trading at $133.37 [2] Analyst Ratings - Wells Fargo analyst Sam Reid maintained an Equal-Weight rating and raised the price target from $110 to $135 [5] - Keefe, Bruyette & Woods analyst Jade Rahmani maintained a Market Perform rating and reduced the price target from $128 to $114 [5] - Wedbush analyst Laura Chico reiterated a Neutral rating with a price target of $130 [5] - Evercore ISI Group analyst Stephen Kim maintained an In-Line rating and cut the price target from $131 to $114 [5] - RBC Capital analyst Mike Dahl maintained a Sector Perform rating and lowered the price target from $122 to $98 [5]

Core Insights - Lennar Corporation is set to release its third-quarter earnings results on September 18, with expected earnings of $2.09 per share, down from $3.90 per share in the same period last year [1] - The company anticipates quarterly revenue of $9.05 billion, a decrease from $9.42 billion year-over-year [1] Management Changes - On August 4, Lennar announced the retirement of general counsel Mark Sustana and chief operating officer Fred Rothman, appointing Katherine Lee Martin as the new chief legal officer [2] Stock Performance - Lennar shares experienced a slight decline of 0.3%, trading at $133.37 [2] Analyst Ratings - Wells Fargo analyst Sam Reid maintained an Equal-Weight rating and raised the price target from $110 to $135 [5] - Keefe, Bruyette & Woods analyst Jade Rahmani maintained a Market Perform rating and reduced the price target from $128 to $114 [5] - Wedbush analyst Laura Chico reiterated a Neutral rating with a price target of $130 [5] - Evercore ISI Group analyst Stephen Kim maintained an In-Line rating and cut the price target from $131 to $114 [5] - RBC Capital analyst Mike Dahl maintained a Sector Perform rating and lowered the price target from $122 to $98 [5]

Group 1: Housing Market Overview - The housing market is currently experiencing a downturn, described as an "ice age," with existing home sales and realtor activity depressed [6][10] - There is optimism about a potential recovery as interest rates may decrease, leading to increased refinancing opportunities and housing transactions [6][7] Group 2: Company Insights - Rocket Companies is highlighted as a key player that has made strategic acquisitions during the market downturn, including a significant mortgage servicing portfolio and Redfin, which drives leads to realtors and mortgage brokers [8][9] - The company has seen an 82% increase year-to-date, indicating strong market positioning despite previous poor demand and delivery reports [9][10] Group 3: Valuation and Investment Potential - Companies like D.R. Horton and Toll Brothers are trading at low price-to-earnings ratios, with D.R. Horton at 12 times earnings and Toll Brothers at 10 times earnings, suggesting they are undervalued [11] - The potential for lower interest rates is expected to fuel growth in these stocks, which are considered attractive buys given their current valuations [10][11]

Core Viewpoint - Bank of America’s mortgage-backed securities research team is analyzing the potential for U.S. mortgage rates to decrease, influenced by Federal Reserve actions and macroeconomic conditions [1][2]. Mortgage Rate Projections - The MBS team believes a path to a 5% mortgage rate exists if the Federal Reserve implements quantitative easing in mortgage-backed securities and aggressive yield-curve control, reducing 10-year Treasury yields to 3.00%-3.25% [2]. - The baseline expectation is for mortgage rates to end 2025 and 2026 at 6.25%, a slight decline from the current average of approximately 6.35%, which has improved from 6.9% recently [3]. Market Reactions and Affordability - Despite Wall Street's optimism regarding potential rate cuts, even a reduction to 5% may not significantly alleviate the affordability challenges faced by American homebuyers [4]. - Housing stocks have seen a rise in anticipation of rate cuts, with companies like D.R. Horton, Lennar, and PulteGroup being highlighted; however, the underlying demand remains sluggish despite lower rates and builder incentives [6]. Economic Scenarios - Two potential scenarios are outlined: a spike in unemployment leading to a flight to safety in financial markets, which could lower mortgage rates, or a severe recession prompting the Fed to cut rates and possibly resume purchasing mortgage-backed securities [5].

Core Insights - Toll Brothers, Inc. has opened a new luxury home community named Toll Brothers at August Park in Spring Hill, Tennessee, which is served by the highly sought-after Williamson County Schools [1][4] Group 1: Community Features - The community features 31 new single-family homes with spacious designs and personalization options, with floor plans ranging from 2,882 to over 4,121 square feet, including 4 to 6 bedrooms and 3.5 to 5.5 baths [3] - Pricing for the homes starts in the upper $800,000s, indicating a premium market positioning [3] Group 2: Location and Accessibility - The community is strategically located near the new June Lake, Interstate 65 Interchange, and Interstate 840, providing easy access to shopping, dining, and entertainment in nearby Franklin and Nashville [4] - Residents will have access to amenities such as a community pool and pool house, enhancing the living experience [4] Group 3: Customer Experience - Toll Brothers offers a one-stop shopping experience at the Toll Brothers Design Studio, allowing customers to personalize their homes with a wide array of selections and professional assistance [6] Group 4: Company Background - Toll Brothers, Inc. is a Fortune 500 Company and the leading builder of luxury homes in the United States, operating in over 60 markets across 24 states [8] - The company has received multiple accolades, including being named one of Fortune magazine's World's Most Admired Companies for over 10 years and having its CEO recognized as one of the Top 25 CEOs by Barron's magazine [9]

America's largest group of homebuilders is feeling good about where the housing market is headed. That's because everyone seems confident that the Fed is poised to cut interest rates for the first time in 2025 this week, the National Association of Homebuilders wrote in a note Tuesday.That's expected to lower borrowing costs for buyers—a much-needed catalyst for the US housing market to reopen after years of higher mortgage rates that have sidelined buyers and sellers. The Fed looks poised to trim its ta ...

Let's get some fresh economic data just crossing. For that, we'll turn back to Rick Santelli. Morning, Rick.>> Yes, good morning again, Carl. We have business inventories. This is the July number, first month of course of the third quarter.And it comes in exactly as expected. Inventories on the business side up 2/10 of a percent. And that's exactly what we have in the rearview mirror for our final June read as well.We do see that the yield curve has steepened. This morning's data has brought two-year note y ...