Housing Stocks Are in Depression Mode.
Whirlpool Down 81%, Lennar Crashed 54% While the S&P 500 Soars
Quick Read – Whirlpool (WHR) reported a 9.6% revenue decline with North America EBIT cratering 96% to $6 million and suspended its dividend to focus on $900 million in debt reduction. Lennar (LEN) saw Q1 revenue drop 13% year over year with gross margin on home sales collapsing to 15.2% from 18.7%, while Pool Corporation (POOL) beat earnings expectations with EPS of $1.45 but discretionary new-pool installs remain depressed due to lack of home turnover. – High mortgage rates and frozen home transaction volume are crushing housing suppliers even as home prices in major metros stay stable and the broader S&P 500 reaches fresh highs. – The analyst who called NVIDIA in 2010 just named his top 10 stocks and Lennar wasn’t one of them. Get them here FREE.
The S&P 500 is at fresh highs while a giant chunk of the real economy sits in a deep freeze. On a recent episode of The Compound and Friends, Michael Batnick and Josh Brown spent a segment unpacking why housing-adjacent stocks have collapsed even as home prices across major metros stay stable. The distinction matters: this is a transaction volume problem, with home prices in major metros holding steady. “The fact that the economy has been as resilient as it is, the fact that the stock market and spending has been what it is, despite the fact that one of the actual largest parts of the economy is in a depression… is remarkable,” Batnick said.