Toll Brothers home

Homebuilders were under pressure this week after Toll Brothers warned of a housing-market slowdown in its quarterly earnings report.
Peers like KB Home, PulteGroup and Lennar fell in sympathy.
Traders are building larger short positions in many of these names, according to analysis by S3 Partners.

Homebuilder stocks were under pressure this week after Toll Brothers issued a warning about a slowdown in the housing market, and an analysis of short interest in the sector suggests there is more pain ahead.

“There has been a recent upswing in short selling in the Homebuilding Sector after short interest in the sector fell by almost a third to $2.96 billion at the end of October,” Ihor Dusaniwsky, managing director of predictive analytics at S3 Partners, a financial technology and analytics firm, wrote in a note on Tuesday.

Rising interest rates have weighed heavily on the group this year, as a jump in borrowing costs traditionally deters first-time home buyers. The Federal Reserve has announced three interest rate hikes so far this year, and eight hikes since late 2015, when the central bank set out to normalize monetary policy following the global financial crisis. As rates have jumped, the XHB, an …read more

Source:: Businessinsider – Finance


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