GRBK - 1 Homebuilder to Invest in the Texas Land Rush
The first quarter of 2022 has brought a nasty mix of headwinds for homebuilders, such as rising mortgage rates, which dampen demand for housing and make it less affordable, and severe supply chain bottlenecks, making it harder to complete builds on time and budget. Not surprisingly, shares of homebuilders have fallen substantially and are now among the cheapest in the market.
One such example is Green Brick Partners (NYSE: GRBK) , down 40% from its 52-week high. After the sell-off, Green Brick looks incredibly cheap at less than five times next year's earnings, and it sits at the nexus of two key long-term growth drivers.
Green Brick is primarily exposed to Texas, and for a home builder, that is an excellent place to be. Texas is one of the hottest real estate markets in the country, with an influx of residents from other states driving demand and a wave of high-powered companies moving to the Lone Star State, bolstering the local economy. For example, in 2020, Texas attracted the second-biggest inflow of residents among all states (trailing only Florida). The trend continued in 2021, with Texas recording the largest numeric gain in population, primarily led by domestic immigration..
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1 Homebuilder to Invest in the Texas Land Rush