Solid demand, backlog of home orders favors builders in '22
ABC News
Homebuilder stocks have outpaced the broader market this year, and analysts are bullish on the prospects for more gains in 2022, despite expectations of continued supply chain woes
LOS ANGELES -- U.S. homebuilder stocks have outpaced the broader market this year, and analysts are bullish on the prospects for more gains in 2022, despite expectations of continued supply chain woes.
The SPDR S&P Homebuilders exchange-traded fund is up 45% this year. Two of the biggest builders by homes sold, D.R. Horton and Lennar, are up about 52% and 46%, respectively. The benchmark S&P 500 index is on pace for a 23% gain.
The strong gains reflect investors’ confidence in builders’ prospects for capitalizing on a red-hot U.S. housing market that is underpinned by strong demand, still-low mortgage rates and a shortage of homes on the market.
Meanwhile, the supply chain bottlenecks have led big builders to build up a backlog of home orders that they won’t be able to deliver until next year.
