S&P index had surged nearly 250 per cent between March 2020 and early May as the housing market proved one of the rare bright spots in an economy paralyzed by the pandemic.
The US housing market is seeing a rise in prices as demand for homes, especially in the suburbs areas, has shown an increase. With the ongoing vaccination programme and economy looking to come back into its earlier shape, more people seem to be opting to move out from the urban locations into the outskirts. The post-pandemic big-ticket demand purchase is happening in the US housing sector, leading to a sharp increase in the stock prices of real estate builders and companies involved in allied activities.
According to Knight Frank’s Global House Price Index, a means of benchmarking average prices across 56 countries and territories, globally, house prices are rising at their fastest rate since Q4 2006 and have increased 7.3% in the year to March 2021.
India moved down 12 spots in the global home price index to the 55th rank in Q1 2021 against the 43rd rank in Q1 2020, with a decline of 1.6 per cent year-on-year (YoY) in home prices, according to Global House Price Index – Q1 2021. The demand for new houses is yet to pick up in India and remains to be seen by when the sector gets its mojo back.
However, US home industry is painting a different picture and as per the Global House Price Index report, the United States witnessed the highest annual price growth rate since 2005, with a 13.2 per cent increase YoY.
With rising prices on the back of strong demand comes the attractive growth story in the stocks of the companies representing the industry. An S&P index of 16 builders had surged nearly 250 per cent between March 2020 and early May as the housing market proved one of the rare bright spots in an economy paralyzed by the pandemic, shows a Bloomberg report.
Here are some US home builders stocks in the activities involved in home buying besides their other commercial activities.
Lennar (LEN) Share price – $ 98.80
Market Cap: About $31B
Lennar is a leading home builder company of new homes and the share price of Lennar (LEN) is up nearly 58 per cent over the last 12 months.
D.R Horton (DHI) Share price – $89.57
Market Cap: About $32.29B
D.R Hortonis a home construction company and the share price of DHI is up nearly 57 per cent over the last 12 months.
United Rentals (URI) Share price – $317
Market Cap: About $22.98B
United Rentals is the world’s largest equipment rental company and the share price of URI is up nearly 108 per cent over the last 12 months.
Otis Worldwide (OTIS) Share price – $83.82
Market Cap: About $35.97B
Otis Worldwide IS the world’s leading company for lift and escalator manufacturing, installation and service. The share price of OTIS is up nearly 47 per cent over the last 12 months.
Sherwin-Williams (SHW) Share price – $275.33
Market Cap: About $73.46B
The Sherwin-Williams Company delivers the best in paint and coatings products to the world and the share price of SHW is up nearly 43 per cent over the last 12 months.
While the Nifty real estate index has more than doubled since the lows of March 2020, the diversification into US residential market by investing in top US home builders stocks may provide the cushion to one’s portfolio. If you are looking to buy these or any other US stocks, an international brokerage platform can be accessed by opening an account with them. Opening a US trading account is simple, easy and can be completed in a matter of a few days. Buying stocks is much easier than buying a home!
Disclaimer: The investing decision in these or any other stock should be taken on your own after carefully evaluating the business and other fundamentals of the company or after consulting one’s financial advisor. It is not a recommendation to buy, hold or sell in any of the stocks. Financial Express Online does not bear any responsibility for their investment advice.