 | | Amanda Heckman
Editorial Director | The free market always finds a way... As the Fed debates its next move ahead of next week's big meeting, the real estate sector has been making moves of its own. [Marc Lichtenfeld Called the 2022 Boom in Oil Stocks... Now He Says Something Even Bigger Is Coming. Click Here to Find Out More. ] Fed Chair Jay Powell has been desperately raising rates to cool inflation... which has raged in the housing market due to a combination of ultra-low rates and free money sparking a frenzy of transactions, insane bidding wars and ridiculous sale prices. (You've no doubt seen this play out in your own neighborhood.) The Fed's interest rate hikes over the past year have led to higher mortgage rates... which have led to some cooling in the market. It's getting harder and more expensive to take out a mortgage. Current homeowners are reluctant to sell and lose their dirt-cheap mortgage rates. So after seeing some negative prints last year when it comes to home sales and builder sentiment, can we consider Mission: Cooldown accomplished? Hardly. Despite the headwinds, the homebuilder sector is having a very good year. Movin' on Up After nearly a year in negative territory, homebuilder sentiment in May came in at 50. That reading means homebuilders are feeling better about their current prospects as well as their prospects six months from now. One reason? All those would-be buyers who can't find existing homes to buy have started buying newly built homes. And homebuilders are being creative and making it worth their while. Over half of builders are offering some sort of incentive, from buying down mortgage rates (in a nod to the current rate environment) to reducing prices. Their efforts have paid off... New home sales clocked in at 683,000 for May, up 4.1% over April's 656,000. That trounced expectations of 665,000. New home sales have also taken up a larger percentage of home sales. In March, they made up 33% of sales... nearly triple the average from 2009 to 2019. And the bullishness is showing up in the charts... Year to date, the SPDR S&P Homebuilders ETF (XHB) is up 23%, while the S&P 500 is up 12%. And thanks to good news about new home sales, the ETF has soared in June, rising nearly 10% for the month. 
View larger image But individual homebuilders are doing even better. Well-known names are outperforming this year - like Lennar (LEN), up 25%... Toll Brothers (TOL), up 48%... and PulteGroup (PHM), up 56%. But as Alpesh told us yesterday, he likes the prospects for leading homebuilder Tri Pointe Homes (TPH), which has been on an absolute tear this year... It's up a scorching 70%! He's convinced the stock has much more room to run thanks to misguided pessimism bringing down estimates. 
View larger image You can see Alpesh run through the stock's numbers right here. So while the real estate sector has plenty of headwinds thanks to higher rates... tighter supply... and inflationary pressure on supplies... Parts of the sector are doing just fine on their own... thankyouverymuch. Looking at homebuilders is the right move for your portfolio today. Everything we do here at Manward is designed to help our readers get their financial house in order. Because if your house isn't in order... you can't live the life you want... do the things you want... or help others the way you want. This week, Joel took that idea further... and examined its effects on your health, relationships and community. And readers loved it. Continue reading... There's a lot of doom and gloom around the housing and real estate sector. But it's not affecting this week's Stock of the Week. This $3 billion company is one of the largest homebuilders in the U.S... and the stock has been on an absolute tear, doubling in the last seven months. But it's undervalued by more than 50%... which means we could see significant upside from here. Get all the details on the stock - including the ticker - in this week's video. Click here or on the image below to watch it. "I would give a thousand furlongs of sea for an acre of barren ground." - William Shakespeare Want more content like this? | | | | | Amanda Heckman | Editorial Director Amanda Heckman is the editorial director of Manward Press. With unrivaled meticulousness, she has spent the past dozen or so years sharpening Andy's already razorlike wit... and has worked with numerous bestselling authors and award-winning financial gurus along the way. | | | | 
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