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U.S. Insights – Ocean Waves for Heat Waves: 54% of MSAs Have Strong Affordability and Fundys

— Jefferies U.S. Equity Research

Jefferies released a collaborative report focused on the U.S. housing market. The firm analyzed 180 of the largest MSAs to identify markets with affordability, as defined by the NAR Housing Affordability Index, and also strong economic fundamentals. Jefferies identified 97 MSAs that met these criteria, more than half the MSAs studied. Notably, Texas, Florida and North Carolina account for ~21% of the “Hot 97.” Jefferies analysts screened their coverage for stocks that were most economically exposed to these markets and identified a number of names they believe should benefit from continued home price appreciation and strength in these affordable markets. The analysis also lends credence to the view that the overall housing recovery should continue. The stocks highlighted in this report include: HOME, HD, CUBE, SAH, ABG, AN, LAD, MYCC, CASY, OC, FBHS, MAS, TCBI, and FHN. FULL REPORT