Homebuilder Slump Deepens: Analysis of 5 Stocks Identified for Selling

The housing market remains challenged as we approach the end of 2025, with high mortgage rates (6.2-6.3%) stymieing potential buyers and sellers resisting price reductions. A Benzinga article [1] published on December 24, 2025, lists LEN (Lennar), MTH (M.D.C. Holdings), DHI (D.R. Horton), NVR (NVR Inc.), and TPH (Taylor Morrison Home) as stocks to sell amid this deepening slump. Industry data [0] shows the NAHB Housing Market Index (HMI) at 39, below the 50 threshold indicating a positive outlook, with 40% of homebuilders cutting prices in December.

Examining stock performance over the past month (Nov 24-Dec 24, 2025) [0], LEN (-13.31%) and MTH (-5.14%) experienced notable declines, while DHI (+0.62%) and NVR (+2.45%) showed slight gains; TPH was down marginally (-0.96%). On December 24, all five stocks posted minor increases: LEN (+0.61%), MTH (+1.31%), DHI (+1.70%), NVR (+0.86%), and TPH (+1.06%). These daily gains may be temporary, possibly influenced by holiday trading conditions, rather than a reversal of broader sector headwinds.

The mixed performance of the identified stocks over the past month highlights varying resilience among homebuilders, but overarching industry signals remain negative. The NAHB HMI below 50 and widespread builder price cuts [0] indicate weak demand and a challenging operating environment. Elevated mortgage rates—while lower than earlier in the year—continue to barrier potential buyers, and seller reluctance to lower asking prices further constrains market activity. The December 24 daily gains should be interpreted cautiously, as they may not reflect underlying fundamental improvements.

Primary risks facing the homebuilder sector include sustained high mortgage rates, further demand declines, and potential inventory buildup if sellers avoid price adjustments [0]. For the identified stocks, these risks could lead to continued underperformance. An opportunity could arise if mortgage rates continue to fall, stimulating buyer demand, but current indicators lean negative due to weak industry sentiment and ongoing market challenges.

This analysis draws from a Benzinga report [1] identifying five homebuilder stocks (LEN, MTH, DHI, NVR, TPH) to sell amid a deepening slump. Industry data [0] includes a weak NAHB HMI (39), 40% of builders cutting prices, and mortgage rates around 6.2-6.3%. Stock performance over the past month is mixed, with LEN and MTH declining significantly, while all stocks gained slightly on December 24. This report provides objective market context without specific investment recommendations.