Home Logon FTA Investment Managers Blog Subscribe About Us Contact Us

Search by Ticker, Keyword or CUSIP       
Blog Home
Bob Carey
Chief Market Strategist
X •  LinkedIn

  A Snapshot Of Homebuilder-Related Stocks
Posted Under: Sectors
Supporting Image for Blog Post

View from the Observation Deck  
  1. After finally setting a new all-time high last year (close on 10/5/20 supplanted previous high on 7/20/05), the S&P Homebuilding Select Industry Index has gone on to establish many new highs. We used the term finally because it took over 15 years to do so. The most recent all-time closing high was set on 4/16/21. 
  2. Year-to-date through 4/16/21, the S&P Homebuilding Select Industry Index posted a total return of 30.71%, compared to 11.92% for the S&P 500 Index, according to Bloomberg. 
  3. Homebuilder-related stocks have also outperformed the broader market in this millennium. From 12/31/99 through 4/16/21, the S&P Homebuilding Select Industry Index posted a cumulative total return of 771.81% (10.70% annualized), compared to 329.63% (annualized) for the S&P 500 Index, according to Bloomberg.    
  4. Sentiment for new construction remains strong. The National Association of Home Builders Market Index (SA) registered a reading of 83 in April 2021, according to Bloomberg. The all-time high was 90, set in November 2020. A reading above 50 indicates more builders view conditions as good than poor. Its average reading so far in the current millennium (2000-April 2021) is 50. The low for the period was 8, set in January 2009.  
  5. Housing starts in the U.S. totaled an annualized 1.739 million in March 2021, beating the consensus estimate of 1.613 million starts, according to the U.S. Census Bureau. Starts were up 19.4% year-over-year in March. 
  6. In March, new building permits reached an annual rate of 1.766 million, topping the consensus estimate of 1.750 million, according to the U.S. Census Bureau. Permits were up 35.6% and 20.1% year-over-year for single-family units and multi-family homes in March.   
  7. The 2021 and 2022 consensus earnings-per-share estimates (in dollars) for the S&P Homebuilding Select Industry Index were $456.77 and $504.23, respectively, as of 4/21/21, according to Bloomberg. Actual earnings totaled $355.74 per share in 2020. 
  8. Bloomberg's 2021 and 2022 estimated year-end price-to-earnings (P/E) ratios on the S&P Homebuilding Select Industry Index were 16.05 and 14.54, respectively, as of 4/21/21. The index's 5-year average P/E was 15.25 as of 4/21/21.
  9. Freddie Mac reported that the U.S. housing market is currently short by some 3.8 million homes, according to Business Insider. 
This chart is for illustrative purposes only and not indicative of any actual investment. There can be no assurance that any of the projections cited will occur. The illustration excludes the effects of taxes and brokerage commissions or other expenses incurred when investing. Investors cannot invest directly in an index. The S&P Homebuilding Select Industry Index provides investors with an equity benchmark for U.S. traded Homebuilding-related securities. The S&P 500 Index is an unmanaged index of 500 stocks used to measure large-cap U.S. stock market performance.  

Download a PDF of this post, please click here.
Posted on Thursday, April 22, 2021 @ 11:13 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
Market Commentary and Analysis
Market Commentary Video
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email

A Snapshot of Growth vs. Value Investing
Consumer Disc. Has Consistently Outperformed Staples And The Broader Market Over The Long-Term
Consider The Potential Opportunity Costs Before You Sell In May And Go Away!
The Real Rate of Return on the 10-Year Treasury Note is Essentially Zero
How Bonds Have Fared Since 8/4/20
The Only Constant Is Change…Usually
A Snapshot Of The U.S. Dollar
Sector Performance Via Market Capitalization (1-Year Anniversary Of The End Of The Bear Market)
Passive Investment Vehicles Have Posted The Strongest Asset Growth Since The End of 2007
A Snapshot Of Two Cyclical Sectors
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
Follow First Trust:  
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2024 All rights reserved.