Housing Industry Changing Due to Pandemic
Almost every industry has been affected by the COVID-19 virus in the last few months. The global pandemic has changed how entire industries conduct business and it has had both positive and negative impacts. Industries such as software have actually benefitted as demand for products that help people work remotely have jumped. Seeing that type of change isn’t really surprising.
One industry that seems to be benefitting, and it’s somewhat surprising, is the housing industry.
The housing industry includes manufacturers of single-family homes and multifamily homes. It also includes builders of condominiums and mobile homes. The industry experienced a terrible crisis from 2005 through 2011 as the global financial crisis hit.
The financial crisis had much of its origins in the U.S. real estate market and that hit the housing industry hard. The industry has been recovering since with New Home Sales trending higher since hitting a low in February 2011.
The annualized rate for new home sales bottomed at 270K in 2011 and it recently peaked in January at 774K. New home sales still aren’t anywhere near the all time high of 1.389 million reached in July 2oo5.
Economists were expecting a big decline in new homes sales in April, but instead the annualized rate increased from March to April. The consensus estimate was for an annualized rate of 485K and it actually came in at 623K. That was actually a small increase from the March reading of 619K.
I have two theories as to why new home sales are doing much better than economists thought. First, the current health crisis is causing many people to rethink their current lifestyle. Instead of wanting to live in the heart of heavily populated cities in high-rises with thousands of others, some people are choosing to move out to the suburbs.
My second theory is based on how so many people are working from home and spending far more time there with their entire family. This may be inspiring people to look for larger living quarters. There is also a trend for companies to make telecommuting a permanent policy. This allows people to move to more affordable areas and away from cities with high housing costs like San Francisco, New York, etc.
Of course another factor is the incredibly low mortgage rates. The housing industry is very dependent on low interest rates and rates hit historically low levels in March. The 10-year treasury yield is the foundation for most rate pricing at mortgage companies. The yield on the 10-year fell below 1.0% in February.
Turning our attention to some of the stocks in the industry, I am impressed with how some of the biggest homebuilders look in terms of their fundamentals. The following table is from Investor’s Business Daily and it shows how these five companies all have extremely good EPS ratings and all have above average SMR ratings.
The EPS ratings measure the company’s earnings growth over the last few years with an emphasis on the most recent quarters. The SMR rating measures the company’s sales growth, profit margin, and return on equity. On the EPS ratings’ scale, 99 is the best a company can get and on the SMR grading system, an A is the highest score.
Looking at Tickeron’s Trend Prediction Engine for June 12, all five of the companies in the table above received buy signals on June 11. This means all of the stocks are expected to move up at least 2% over the next week.
Personally I think these stocks could see an upward trend for several quarters. There are a number of the stocks in the group that have shot up considerably from their March lows. This has put several members of the industry in overbought territory on their weekly charts, but the selling we saw in the first half of this week could be providing a short-term buying opportunity.
If we see additional selling in the next few weeks, it could provide a long-term buying opportunity. A correction that lasts a few weeks will move the stocks out of overbought territory. Given the strong fundamental ratings of the five stocks listed above, I will be looking for a possible entry point for a trade that lasts for several months or even a couple of quarters.
KBH in upward trend: price rose above 50-day moving average on June 01, 2026
KBH moved above its 50-day moving average on June 01, 2026 date and that indicates a change from a downward trend to an upward trend. In of 38 similar past instances, the stock price increased further within the following month. The odds of a continued upward trend are .
Technical Analysis (Indicators)
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where KBH's RSI Oscillator exited the oversold zone, of 23 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Momentum Indicator moved above the 0 level on May 26, 2026. You may want to consider a long position or call options on KBH as a result. In of 89 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are .
The Moving Average Convergence Divergence (MACD) for KBH just turned positive on May 22, 2026. Looking at past instances where KBH's MACD turned positive, the stock continued to rise in of 52 cases over the following month. The odds of a continued upward trend are .
The 10-day moving average for KBH crossed bullishly above the 50-day moving average on June 08, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In of 14 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where KBH advanced for three days, in of 302 cases, the price rose further within the following month. The odds of a continued upward trend are .
Bearish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 13 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where KBH declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for KBH entered a downward trend on May 29, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is seriously undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (0.878) is normal, around the industry mean (1.964). P/E Ratio (10.425) is within average values for comparable stocks, (18.281). Projected Growth (PEG Ratio) (0.000) is also within normal values, averaging (3.288). Dividend Yield (0.019) settles around the average of (0.025) among similar stocks. P/S Ratio (0.610) is also within normal values, averaging (1.545).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating fairly steady price growth. KBH’s price grows at a lower rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. KBH’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 65, placing this stock worse than average.
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Industry description
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Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
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General Information
a constructor and seller single family homes as well as condominium complexes
Industry Homebuilding
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