Homebuilding stocks have been in a rut for quite some time. The SPDR S&P Homebuilders ETF (NYSEARCA: XHB) is a commonly used proxy for this industry's performance. The fund has greatly underperformed the general market, with returns of 10% in 2024, -0.7% in 2025, and a single-digit return in 2026. Low housing affordability, driven partially by elevated interest rates, has led to steeply declining revenues and earnings across the industry.
Investors just got their latest look at the status of the housing market. Lennar (NYSE: LEN), one of the country’s top homebuilders and a Berkshire Hathaway (NYSE: BRK.B) portfolio company, recently reported earnings. Lennar’s report was decidedly mixed, but multiple important variables showed signs of improvement. It is possible the worst is over for Lennar, but homebuilders generally continue to face a difficult macro backdrop.
