This tweet will be one year old tomorrow and I think it captures the popular sentiment at the time.
What's happened since? Mortgage rates have risen faster and higher than nearly everyone thought and what's happened? In today's US existing home sales report, prices were down just 0.9% y/y.
The largest US home builder -- D.R. Horton -- also reported earnings today and they're instructive. US housing market trends are showing signs of improvement, the company said as it reported better-than-expected quarterly earnings. The company's EPS stood at $2.73, 42% above the consensus of $1.92, although down 32% YoY.
During the conference call, D.R. Horton executives repeatedly emphasized the stabilizing market conditions with respect to cost, demand, deliveries, and margins. They noted that the company is witnessing price stability sooner than anticipated a quarter ago. However, they also acknowledged ongoing uncertainty regarding mortgage rates, capital markets, and general economic conditions
For the current quarter, the company forecast closing 20-21K homes, down just 4% from a year ago.
So far, DHI said it's seeing a strong start to the spring selling season and is pleased with the sales pace in April. The company saw a step-up in starts this quarter and expects to incrementally increase starts in the coming quarters, indicating a positive outlook for the US housing market.
If that's not enough, I think the company's share price tells the tale.
