Existing home sales fell -4.1% in October to a seasonally adjusted annual rate of 3.79 million. That’s the lowest reading in over ten years, as shown below. For perspective, consider the current 3.79 million home sales are lower than during the first months of the pandemic.
The data is based on home sales that settled in October when mortgage rates peaked near 8%. Mortgage rates are now down half a percent and could fall much further if the economy slows. Consequently, lower mortgage rates may revive the housing market. Therefore, mortgage financing companies that have been struggling may show signs of life.
Our scan seeks stocks with low valuations and low levels of debt within the mortgage finance industry. Only four stocks met our criteria shown below.
- Industry- Mortgage Finance
- P/E < 10
- Debt To Equity <2
Security Natl. Financial Corp. (SNFCA)
CNFinance Holdings (CNF)
Income Opportunity Realty Investors (IOR)
Mr. Copper Group (COOP)
Five for Friday
Five for Friday uses stock screens to produce five stocks that we expect will outperform if a particular investment theme plays out in the future. Investment themes may be relevant to the current or expected market, industry and/or economic trends. Investment themes may not always represent our current forecast.
This report is not a recommendation to buy or sell the named securities. We intend to elicit ideas about stocks meeting specific criteria and investment themes. Please read our disclosures carefully and do your own research before investing.
Michael Lebowitz, CFA is an Investment Analyst and Portfolio Manager for RIA Advisors. specializing in macroeconomic research, valuations, asset allocation, and risk management. RIA Contributing Editor and Research Director. CFA is an Investment Analyst and Portfolio Manager; Co-founder of 720 Global Research.