Shares of home builders have had a nice run since the election, driven by healthy profits and rising confidence. That sweet spot is likely over, and the shift will put a damper on the overall housing market.
Home builders have benefited from stable costs and rising prices. Operating margins at 13 public builders tracked by research firm Zelman & Associates averaged 10% in the first quarter, well over the 8% median over the prior 25 years.
The sweet spot is under fire by rising costs, ironically emanating from Washington.
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