XHB - A Dive Into The Housing Market: Leaders And Rising Stars Part 1

• The housing market is far from crashing, and any arguments for it are exaggerated. However, investors should expect a pullback in home prices after reaching unsustainably high levels.
• Similarly, the PMI market goes through a testing phase with increasing mortgage rates, but the high FICO scores support a healthy environment with falling forbearance and default rates.
• DHI is the largest US homebuilder, and its lighter asset model with a 76% land optioned strategy supports the future profitability and offers a hedge in case of an unexpected downturn.
• NMIH is the smallest and most undervalued player in the PMI sector, which grows at double-digit rates, has the best-in-class insured portfolio with the highest credit quality compared to its peers, and trades around its Book Value.

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