'Fast Money' traders talk gains in the housing sector as mortgage rates fall
Speakers
Guy Adami
— Trader
Steve Liesman
— Senior Economics Reporter
Julie Biel
— Portfolio Manager, Kayne Anderson Rudnick
Diana Olick
— CNBC Real Estate Correspondent
Summary
The segment discusses falling mortgage rates and whether they create a trade in housing. A Fast Money trader prefers Home Depot over homebuilders, citing low expectations and a technical floor, while cautioning that affordability remains structurally difficult. Other panelists and guests debate whether lower rates will meaningfully boost housing turnover, noting supply shortages and limited borrower depth. The discussion highlights housing-related ETFs and the structural challenges in the mortgage market.
- Mortgage rates are falling, sparking debate on housing trades.
- Fast Money trader favors Home Depot over homebuilders.
- Home Depot seen near technical floor with low expectations.
- Homebuilders cautioned due to structural affordability issues.
- XHB noted as broader housing ETF, not pure homebuilders.
- Steve Liesman says rate cuts unlikely to cause a housing rush.
- Julie Biel cites structural shortage of homes and mortgage buyers.
- Administration efforts to lower mortgage rates are a focal point.
Ideas
Home Depot offers low-expectation remodeling rebound.
The trade is in Home Depot, not homebuilders. He is cautious on the housing headlines because affordability is structurally difficult due to an income gap and supply-side dynamics that do not meet buyers. Home Depot around $350 seems to have found a technical floor, and expectations are extremely low: comps are guided to roughly flat (down one to up one), and home improvement as a share of wallet is at 30-year lows. He sees opportunity in another remodeling/pro business cycle.
Cautious on homebuilders due to structural affordability.
He does not think the trade is in homebuilders and would be cautious on the group. The affordability headlines are fantastic, but it will be structurally difficult to change affordability because of an income gap and supply-side dynamics that do not meet those buyers.
