What does falling mortgage rates mean for home builder stocks? Jay McCanless, Housing Analyst at Wedbush Securities, joins Yahoo Finance to discuss why he is less bullish on home builders and to shed light on one under-the-radar stock: Cavco Industries (CVCO).
McCanless illuminates that Cavco "sells affordably priced homes. According to the Manufactured Housing Institute, the average price of a single section home was $70,000 in '22, and $210,000 for a double section home. You compare that where existing home prices are on a median basis at almost $330,000 in the US. Cavco is a name that sells an affordable payment, which is what the manufactured housing buyers are typically looking for. We also think the balance sheet of this company, which is all, a net cash balance sheet, significantly net cash balance sheet, gives them the staying power to weather some of the mortgage rate fluctuations that the manufactured housing market saw in '23, just like the site-built housing market saw."
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