Homebuilders have 'a lot of tailwinds': Stocks to watch
Homebuilder stocks (XHB) have jumped since investors began pricing in a September rate cut from the Federal Reserve.
Oppenheimer executive director Tyler Batory says that when it comes to homebuilders, investors always need to be aware of what is happening with interest and mortgage rates. He also points to weakness in the existing home sales market along with strong margins and profitability for the builders as "strong tailwinds" for the space.
Batory doesn't think a Federal Reserve rate cut will be enough to ease the somewhat frozen housing market. He also argues that mortgage rate buydowns will hit builders' bottom lines as much as feared.
So which stocks does Batory like? Toll Brothers (TOL) an PulteGroup (PHM). Find out why in the video above.
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This post was written by Stephanie Mikulich.