Investing in the top home builder stocks can be a strategic move for investors looking to capitalize on the real estate market’s growth. As of June 2024, the real estate market continues to demonstrate resilience even as supply hits the market.
While the pandemic-induced housing boom may have subsided, there is still considerable demand for new homes. This is driven by a variety of factors, including a growing population and a shortage of existing inventory. Furthermore, this demand, coupled with potential easing interest rates going into 2025 is an extremely positive sign. With the home building sector continuing its strong growth trends in 2024, discerning investors can position themselves to capitalize on this wave.
Now, let’s discover the top three home builder stocks to buy in June 2024!
Lennar Corp (LEN)
Lennar Corp (NYSE:LEN), one of the nation’s largest home builders, has a diversified portfolio that includes everything from entry-level homes to luxury communities. Its footprint in high-growth markets and adult-focused segmentation of premium buyers provides it with a significant competitive edge.
Lennar Corp has seen an acceleration in revenue and earnings since the pandemic, but saw earnings taper off in 2023. While this may seem like a negative sign, it is only a small hiccup along the way. Management is currently focused on driving long term profitable growth, while maintaining strong liquidity and cash flow from operations. Its pricing incentives have enabled consistent double digit sales volume growth as it manages a dynamic interest rate environment. In Q1 FY24, revenue increased 13% year over year to $7.31 billion. Net earnings rose 21% to $719 million, or $2.57 per share. During the quarter, new orders swelled 28% year over year, with deliveries up 23% to 16,798 homes. With interest rates projected to come down going into 2025, LEN stock will undoubtedly be one of the major beneficiaries.
DR Horton (DHI)
DR Horton (NYSE:DHI) holds the title as the largest home builder in the United States by volume. The company has consistently demonstrated impressive revenue growth and profitability over the last decade. This can be attributed to its diverse portfolio of homes catering to a wide range of buyers.
DR Horton is no stranger to home building. Headquartered in Arlington, Texas, the company’s extensive geographic footprint across the United States positions it to capitalize on regional housing demand. Despite facing headwinds from rising material costs and labor shortages, DR Horton has remained extremely resilient. Its affordable product offerings and flexible lot supply have contributed to its growth in the 2024 fiscal year. In Q2 FY24, revenue increased 14% year over year to $9.11 billion. Net earnings rose 24% year over year to $1.1 billion, or $3.52 per share. Homes closed increased 15% to 22,548 homes, while net sales orders increased 14% from the year prior. The home building sector continues to see notable strength in 2024, as demand continues to outpace supply. This trend is likely to continue, making DHI stock one of the best home builder stocks to buy in June.
Toll Brothers (TOL)
Toll Brothers (NYSE:TOL) stands out as a premiere choice among the top home builder stocks to buy. As one America’s leading luxury home builders, the company is also reaping the rewards of the supply demand dynamics in 2024.
Toll Brothers primarily caters to affluent home buyers who are willing to pay a premium for quality and craftsmanship. The company has demonstrated impressive revenue and earnings growth, supported by a solid backlog of high-end home orders. Additionally, it demonstrated notable earnings growth in 2023 during the sector’s slump in 2023. In the 2023 fiscal year, earnings per share increased 13% year over year to $12.36 per share. It delivered 2,755 new homes and generated $9.9 billion in new home sales. This trend has continued and management is extremely confident in the supply demand imbalance with U.S. home inventories at historically low levels. As one of the leading luxury home builders in the United States, TOL stock is set to continue taking advantage of the supply crunch in 2024 and beyond.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
