Homebuilders performed well fundamentally over the past 5 years, yet share price is lagging behind. A basket of 6 random homebuilders since 2015 only has a CAGR of 4.8%. But each individual company, except for one, significantly improved earnings and book value per share in that time. Current levels of earnings and growth present a good opportunity unless the market is correct that demand for new homes will reverse. After carefully reviewing long term homebuilding trends I believe the market has it wrong.
First, I will analyze the homebuilding trends. This is the key