LGIH - Blue Sweep wouldn't be all bad news for homebuilders Wells Fargo says

The looming election has been weighing on homebuilder stocks over in the latter half of October, writes Wells Fargo analyst Truman Patterson."We believe election outcome results, potential changes in future tax policy, fiscal stimulus concerns and rising rates are in control of equity performance at present and not near-to-intermediate term housing fundamentals," Patterson wrote.See the performance of ITB, MTH, and NVR vs. the S&P 500 over the past month:Under a scenario where Republicans continue to hold the White House and the Senate, Patterson generally expects the current housing market dynamics to continue "with the potential for mortgage rates to drift lower."Also, the state and local tax ("SALT") caps for deductions against federal taxes would likely remain in place, "driving continued migration to the South and Southeast."Should the Democrats control both the presidency and Congress,  the corporate tax rate will most likely rise to 28% from 21%. Homebuilders with lower tax

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Blue Sweep wouldn't be all bad news for homebuilders, Wells Fargo says