Homebuilders & Housing Stocks

This one may be a little surprising, given the current state of the housing market. Housing is too expensive, demand is slowing, and rates are crushing affordability. 

But here’s the thing. Even a modest drop in rates can dramatically change that picture. 

Lower mortgage rates can improve affordability, reduce borrowing costs, and help unlock fresh demand. And when that happens, housing activity can turn higher faster than most people think.

Layer in the seasonal strength heading into spring and summer the buying season—and suddenly, this becomes one of the most sensitive (and potentially explosive) areas of the market.

These are the stocks I’m watching right now: D.R. Horton Inc. (NYSE:DHI), Lennar Corp. (NYSE:LEN), PulteGroup Inc. (NYSE:PHM).

So, if the Fed begins to shift (even subtly), we could start to see ripple effects across the entire market—fast. 

But the key isn’t waiting for that move to happen. it’s building a position ahead of it.

—- the original article: 3 Assets that Could Explode