Shares of Meritage Homes and PulteGroup surged in afternoon trading after both chambers of Congress passed the bipartisan 21st Century ROAD to Housing Act, the most significant federal housing-supply legislation since 1990. The bill aims to boost supply by cutting red tape, streamlining environmental reviews, modernizing manufactured-housing rules, and barring institutional owners of 350-plus single-family homes from buying more existing homes. Meritage Homes jumped 9.3% and PulteGroup rose 7.8%, while peer KB Home reported a second-quarter revenue beat of $1.11 billion against a $1.10 billion consensus, with the 10-year Treasury yield dropping below 4.5%. The legislation is seen as a multi-year volume driver for builders, lowering construction costs and friction, and the 350-home cap is expected to shift demand toward new construction. The House also stripped a seven-year forced-sale rule on build-to-rent homes that the National Association of Home Builders warned could cut single-family output by about 40,000 units a year.
Meritage CorporationThe housing-supply bill cuts red tape and streamlines approvals, directly benefiting Meritage Homes as a homebuilder.
PulteGroup IncThe housing-supply bill cuts red tape and streamlines approvals, directly benefiting PulteGroup as a homebuilder.
KB Home