President Donald Trump and Federal Housing Finance Agency Director Bill Pulte are fueling a deeper selloff in already struggling homebuilder stocks.
A series of social media posts, from the US president over the weekend and then from the FHFA director and real estate scion Pulte on Wednesday, are helping put an S&P gauge of builders on track for a four-day losing streak. The group has lost more than 9% over the period, the worst such selloff since Trump's tariff announcement in early April.
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Homebuilders are trailing the broader market this year, beset by rising inventories, stretched consumers and a fresh wave of levies on materials like lumber and kitchen cabinets. Now, with the Trump administration blaming the builders for the housing affordability crisis the selloff has gone from bad to worse. The group has tumbled about 19% in the past 12 months, badly lagging the S&P 500's AI-fueled 16% rally.
The latest losses followed a Sunday post from Trump who said homebuilders were sitting on millions of empty lots, and "they have to start building Homes." Pulte followed with his own critique.
"When I was young and growing up in the Pulte Homes business, Big Homebuilders had less than 10% of the market. Today, that number is 50% and some say 60%. With great market share comes great responsibility," the
For loans sold to Fannie Mae and Freddie Mac, the mortgage giants will be asking "relevant market participants to disclose Big Builder loans," Pulte added.
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To Neil Dutta, Renaissance Macro Research's head of economics, the call to build more houses would only hurt builders, given the unsold inventory they are sitting on, while increasing industry concentration.
"Bill Pulte has shifted his ire to the public homebuilders," Dutta wrote in a note Wednesday. "Bullying builders to make homes when margins are eroding and prices are already falling is not exactly the best combination for homebuilders."
The hardest hit stocks in the sector this year include LGI Homes Inc., Champion Homes Inc. and Century Communities Inc., which are all down 20% or more. Lennar Corp., the second-biggest index member, is down 10%, while PulteGroup, one of the largest homebuilders in the US, has advanced 12%.
On Thursday, PulteGroup and Toll Brothers Inc. fell more than 3% each after CFRA analyst Ana Garcia downgraded the pair, calling PulteGroup "overvalued." She also flagged a "decelerating labor market and declining consumer confidence as consumers deal with economic uncertainty." Regarding Toll Brothers, she said the company's advantage with wealthier customers "may weaken as more expensive existing homes come on the resale market, giving luxury buyers more options."
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The problems facing the industry are fairly well known. Last month, Bloomberg Intelligence analyst Drew Reading wrote that US homebuilders were dealing with growing margin pressure as rising inventory drives price cuts in key markets. He noted new-home supply had spiked, with for-sale inventory at the highest since 2007.
Last week, Reading estimated that tariffs on softwood lumber and kitchen and bath cabinets could add more than $10,000 to the cost of a new home. Earlier this week, Evercore ISI analyst Stephen Kim downgraded builder names on depressed home-buying sentiment.
