Homebuilding Sector Getting Squeezier
Author:
Ihor Dusaniwsky
Managing Director of Predictive Analytics, S3 Partners
The Homebuilding sector has ebbed and flowed this year on the level of optimism on the number of interest rates cuts in 2024 and the SPDR S&P Homebuilding ETF (XHB) is now up +16% for the year, up +8% over the last thirty days and up +14% since its recent low in early July.
We are following thirty-nine stocks with short interest in the homebuilding sector with $6.9 billion in total short interest, 4.17% SI % Float and a 0.35% average stock borrow fee.
Homebuilding Short Interest
Ticker
SI % Float
Fee
Short Interest
DR HORTON INC
DHI
2.29%
0.30%
$1,131,815,726
LENNAR CORP A
LEN
2.76%
0.30%
$1,116,570,387
PULTEGROUP INC
PHM
3.43%
0.30%
$882,968,913
KB HOME
KBH
9.54%
0.30%
$564,549,596
TOLL BROTHERS INC
TOL
3.56%
0.30%
$479,628,808
INSTALLED BUILDING PRODUCTS
IBP
7.19%
0.82%
$418,822,438
NVR INC
NVR
1.63%
0.30%
$414,301,449
TOPBUILD CORP
BLD
2.63%
0.30%
$370,810,589
LGI HOMES
LGIH
12.03%
0.30%
$257,670,964
MERITAGE HOMES CORP
MTH
3.22%
0.30%
$219,982,607
TAYLOR MORRISON HOME CORP
TMHC
2.41%
0.30%
$162,620,474
CENTURY COMMUNITIES INC
CCS
4.47%
0.32%
$126,278,908
M/I HOMES INC
MHO
2.76%
0.30%
$118,086,479
SKYLINE CORP
SKY
2.70%
0.30%
$117,984,236
DREAM FINDERS HOMES INC
DFH
11.77%
0.30%
$99,896,573
GREEN BRICK PARTNERS
GRBK
3.10%
0.30%
$93,416,113
TRI POINTE GROUP INC
TPH
2.07%
0.30%
$86,132,384
CAVCO INDUSTRIES
CVCO
2.32%
0.30%
$72,813,665
HOVNANIAN ENTERPRISES INC
HOV
6.87%
0.30%
$62,077,978
BEAZER HOMES USA
BZH
5.58%
0.30%
$53,748,057
Total Homebuilding Short Interest
4.17%
0.35%
$6,929,355,143
Total Homebuilding short interest has increased by $1.5 billion over the last thirty days, a +28.5% increase in total short interest. This increase was made up of $537 million of new short selling in addition to a $1.0 billion mark-to-market increase in the value of the shares shorted. Two thirds of the stocks in the Homebuilding sector had increased short selling over the last thirty days.
The stocks with the largest amount of short selling over the last thirty days are:
Homebuilding Short Selling
Ticker
SI % Float
Short Interest
30D Change Shares Shorted
PULTEGROUP INC
PHM
3.43%
$882,968,913
$179,553,500
TOLL BROTHERS INC
TOL
3.56%
$479,628,808
$158,706,652
INSTALLED BUILDING PRODUCTS
IBP
7.19%
$418,822,438
$81,018,263
KB HOME
KBH
9.54%
$564,549,596
$76,110,994
TOPBUILD CORP
BLD
2.63%
$370,810,589
$69,241,937
LENNAR CORP A
LEN
2.76%
$1,116,570,387
$28,171,107
HOVNANIAN ENTERPRISES INC
HOV
6.87%
$62,077,978
$20,541,475
LGI HOMES
LGIH
12.03%
$257,670,964
$17,835,066
DREAM FINDERS HOMES INC
DFH
11.77%
$99,896,573
$13,232,389
M/I HOMES INC
MHO
2.76%
$118,086,479
$6,539,702
The stocks with the largest amount of short covering over the last thirty days are:
Homebuilding Short Covering
Ticker
SI % Float
Short Interest
30D Change Shares Shorted
GREEN BRICK PARTNERS
GRBK
3.10%
$93,416,113
($68,208,214)
DR HORTON INC
DHI
2.29%
$1,131,815,726
($35,950,683)
SKYLINE CORP
SKY
2.70%
$117,984,236
($19,882,297)
TAYLOR MORRISON HOME CORP
TMHC
2.41%
$162,620,474
($9,785,956)
NVR INC
NVR
1.63%
$414,301,449
($2,753,361)
MERITAGE HOMES CORP
MTH
3.22%
$219,982,607
($1,448,449)
LANDSEA HOMES CORP
LSEA
7.07%
$12,192,995
($961,001)
UNITED HOMES GROUP INC
UHG
8.52%
$1,493,009
($124,994)
LEGACY HOUSING CORP
LEGH
5.91%
$15,927,552
($91,576)
BERKELEY GROUP HOLDINGS PLC ADR
BKGFY
0.01%
$1,004,440
($33,524)
Total Homebuilding Short Interest
3.79%
$6,929,355,143
$537,711,104
Homebuilding shorts are down -$959 million in year-to-date mark-to-market losses, -17.93%. 61% of every Homebuilding shorted stock was an unprofitable trade in 2024, and 93% of every dollar shorted in the Homebuilding sector was unprofitable.
The Homebuilding stocks with the largest YTD mark-to-market profits are:
Homebuilding YTD MTM P\L
Ticker
Avg Short Interest
YTD MTM P\L
P\L %
LGI HOMES
LGIH
$236,414,216
$58,553,701
24.77%
DREAM FINDERS HOMES INC
DFH
$117,907,452
$15,206,431
12.90%
LANDSEA HOMES CORP
LSEA
$10,980,529
$1,270,612
11.57%
UNITED HOMES GROUP INC
UHG
$3,648,999
$921,275
25.25%
GAFISA SA ADR
GFASY
$12,653
$34,329
271.32%
UNITED HOMES GROUP WARRANT
UHGWW
$22,119
$20,415
92.30%
LEAD REAL ESTATE CO LTD ADR
LRE
$49,760
$14,574
29.29%
CYRELA BRAZIL REALTY SA ADR
CYRBY
$42,896
$512
1.19%
CONCRETE LEVELING SYSTEMS INC
CLEV
$199
$334
167.48%
CAVU RESOURCES
CAVR
$123
$197
160.55%
The Homebuilding stocks with the largest YTD mark-to-market losses are:
Homebuilding YTD MTM P\L
Ticker
Avg Short Interest
YTD MTM P\L
P\L %
PULTEGROUP INC
PHM
$583,176,217
($142,982,451)
-24.52%
LENNAR CORP A
LEN
$817,974,259
($136,930,800)
-16.74%
DR HORTON INC
DHI
$852,026,333
($134,457,093)
-15.78%
KB HOME
KBH
$394,126,416
($125,623,743)
-31.87%
TOLL BROTHERS INC
TOL
$361,586,289
($116,590,010)
-32.24%
INSTALLED BUILDING PRODUCTS
IBP
$257,564,114
($79,832,125)
-31.00%
NVR INC
NVR
$365,404,380
($67,807,486)
-18.56%
TOPBUILD CORP
BLD
$235,792,118
($46,847,002)
-19.87%
TAYLOR MORRISON HOME CORP
TMHC
$136,221,699
($30,986,177)
-22.75%
GREEN BRICK PARTNERS
GRBK
$93,798,986
($28,320,974)
-30.19%
Total Homebuilding YTD MTM P\L
$5,352,506,349
($959,438,406)
-17.93%
Homebuilder shorts have had an up and down first half of the year but most of the year-to-date losses they have incurred have been recent. Homebuilding shorts are down -$1.04 billion in thirty-day mark-to-market losses, -17.27%. 88% of every Homebuilding shorted stock was an unprofitable trade over the last thirty days, and 99% of every dollar shorted in the Homebuilding sector was unprofitable. The Homebuilding sector has been a radioactive short recently.
The Homebuilding stocks with the largest thirty-day mark-to-market profits are (there are only six!):
Homebuilding 30D MTM P\L
Ticker
Avg Short Interest
30D MTM P\L
P\L %
UNITED HOMES GROUP WARRANT
UHGWW
$17,478
$5,343
30.57%
HARBOR CUSTOM DEVELOPMENT INC
HCDIQ
$147
$206
139.85%
US LIGHTING GROUP INC
USLG
$59
$28
47.04%
CONCRETE LEVELING SYSTEMS INC
CLEV
$243
$19
7.65%
RJD GREEN INC
RJDG
$300
$4
1.47%
VANJIA CORP
VNJA
$81
$4
4.79%
The Homebuilding stocks with the largest thirty-day mark-to-market losses are:
Homebuilding 30D MTM P\L
Ticker
Avg Short Interest
30D MTM P\L
P\L %
DR HORTON INC
DHI
$1,002,195,983
($208,489,752)
-20.80%
LENNAR CORP A
LEN
$1,005,193,116
($145,514,509)
-14.48%
PULTEGROUP INC
PHM
$744,048,362
($100,560,814)
-13.52%
KB HOME
KBH
$477,723,670
($84,971,303)
-17.79%
INSTALLED BUILDING PRODUCTS
IBP
$343,006,330
($77,180,655)
-22.50%
TOLL BROTHERS INC
TOL
$386,173,935
($58,888,597)
-15.25%
TOPBUILD CORP
BLD
$323,646,847
($47,940,206)
-14.81%
LGI HOMES
LGIH
$233,189,753
($39,402,863)
-16.90%
NVR INC
NVR
$361,361,833
($35,870,485)
-9.93%
MERITAGE HOMES CORP
MTH
$201,715,855
($35,543,078)
-17.62%
Total Homebuilding 30D MTM P\L
$6,021,759,393
($1,040,150,016)
-17.27%
The Homebuilding Sector is not a very crowded sector on the short side with an average Crowded score of 26.19 versus the U.S. average of 32.95. Only LGIH has a Crowded score over 50.
Homebuilding Crowded Stocks
Ticker
Short Interest
Crowded Score
LGI HOMES
LGIH
$ 257,670,964
52.50
DREAM FINDERS HOMES INC
DFH
$ 99,896,573
42.50
SMITH DOUGLAS HOMES CORP
SDHC
$ 28,684,395
40.00
KB HOME
KBH
$ 564,549,596
37.50
INSTALLED BUILDING PRODUCTS
IBP
$ 418,822,438
37.50
PULTEGROUP INC
PHM
$ 882,968,913
30.00
DR HORTON INC
DHI
$ 1,131,815,726
25.00
LENNAR CORP A
LEN
$ 1,116,570,387
25.00
TOLL BROTHERS INC
TOL
$ 479,628,808
22.50
CENTURY COMMUNITIES INC
CCS
$ 126,278,908
22.50
Homebuilding Crowded Stocks
$6,929,355,143
26.19
U.S. Average Crowded Score
32.95
But the Homebuilding sector is becoming more squeezable with their recent mark-to-market loses and an average Squeeze score of 37.96 versus the U.S. average of 34.27. SDHC, HOV and LGUH and three of the more squeezable names in the sector.
Homebuilding Squeeze Stocks
Ticker
Short Interest
Squeeze Score
SMITH DOUGLAS HOMES CORP
SDHC
$ 28,684,395
80.00
HOVNANIAN ENTERPRISES INC
HOV
$ 62,077,978
62.50
LGI HOMES
LGIH
$ 257,670,964
60.00
DREAM FINDERS HOMES INC
DFH
$ 99,896,573
52.50
KB HOME
KBH
$ 564,549,596
47.50
INSTALLED BUILDING PRODUCTS
IBP
$ 418,822,438
47.50
DR HORTON INC
DHI
$ 1,131,815,726
45.00
M/I HOMES INC
MHO
$ 118,086,479
42.50
PULTEGROUP INC
PHM
$ 882,968,913
40.00
LENNAR CORP A
LEN
$ 1,116,570,387
35.00
Homebuilding Squeeze Stocks
$6,929,355,143
37.96
U.S. Average Squeeze Score
34.27
We should see a reversal of the short selling activity we have seen over the last thirty days due to the large mark-to-market losses short sellers have incurred. In fact, we have already seen a trickle of short covering over the last seven days with $40 million of Homebuilding shares bought-to-cover.
Today’s +3.3% mid-day move in the Homebuilding sector will only add onto the pressure to trim exposure in the sector, especially with the chances of September Fed rate cut increasing on continued strong consumer spending coupled with a moderate rise in the PCE.
Homebuilding stocks should become more squeezable as increased consumer housing demand drives long buying momentum and stock prices and the accompanying short-side buy-to-covers edging Homebuilding sector stock prices even higher.
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