Earlier this morning, the Mortgage Bankers Association reported that weekly applications for U.S. home mortgages slipped it its lowest level since February. According to the association, its leading indicator of housing sales dropped 2% last week.
In addition, the Census Bureau recently reported that home ownership dropped to 62.9% in the second quarter, down from 63.5% in the first quarter. Home ownership is now at its lowest level in 50 years and well below its peak of 69.2% in June 2004.
What’s interesting is that the decline occurred despite lower mortgage rates and falling housing prices. Interest rates on 30-year fixed rate mortgages fell to a more than three-year low in July, falling in lock-step with Treasury yields. And the S&P 500 Case-Shiller Index showed that housing prices in 20 major metropolitan areas declined 0.1% in May.
So despite the U.S. government pushing only 3% down mortgages, low mortgage rates and falling home prices, homeownership continues to steadily decline. And in this environment, many homebuilders are struggling.
The nine homebuilders below, in particular, are waving big red flags, as all nine currently receive a D-rating in Portfolio Grader.
To see how other homebuilders are faring right now, consider checking out their Portfolio Grader ratings.