Home builders hit new lows for the year after handful of downgrades
The home builder sector slumped to a new low for the year, after J.P. Morgan’s Michael Rehaut downgraded a handful of companies, citing concerns over weakening housing market fundamentals.
Rehaut cut his rating on five companies, turning bearish on two of them, but he slashed his stock price targets on all 12 home builders he covers.
The housing recovery is expected to remain “fairly tepid” in 2019, making him more cautious on the group, as “rising new home inventory and declining profitability should result in a slower rate of home price appreciation next year,” Rehaut wrote in a note to clients.
The iShares U.S. Home Construction exchange-traded fund