Could a Harris Victory Send Housing Stocks Soaring?

A month or two ago, we covered the top stocks in the event of respective Trump and Biden victories. Obviously, the election landscape has shifted since then, so we thought it was time to revisit the subject, and see what a potential Kamala Harris presidency could mean for your portfolio. (Miss the original story? Check it out here.)

Harris continues to pull slightly ahead in some polls, and her housing-focused economic policies are a key talking point. 

One of Harris’ biggest proposals is addressing the U.S. housing shortage by constructing three million new homes in her first term. She’s also planning tax incentives for affordable housing and starter homes, while targeting corporate landlords and Wall Street investors. 

These policies could benefit sectors like homebuilders, building material suppliers, and land developers—making them key areas to watch if Harris wins.

Homebuilders are an obvious winner under Harris' plan to boost housing supply. Companies involved in residential construction, especially those focusing on affordable housing, could see substantial demand as Harris seeks to create millions of new units. Tax incentives for builders would help offset costs, encouraging more construction at a time when inventory is low.

One of our current favorite names to watch in this space, Green Brick Partners (NYSE: GRBK), has been on a monster run this year and continues to hit new all time highs. But according to our due diligence checks, its valuation only recently became stretched according to Ben Graham’s formula: 

• GRBK ($80.56) is trading above its intrinsic value of $67.78, according to an updated version of Benjamin Graham's Formula from Chapter 11 of "The Intelligent Investor" 

That said, it may still be a decent value according to other metrics:

• GRBK is good value based on its earnings relative to its share price (10.95x), compared to the US market average (24.27x)
• GRBK is good value based on its earnings relative to its share price (10.95x), compared to the US Residential Construction industry average (13.75x)

The two top analysts who cover the stock recently issued hold ratings, however:

Overall, it may be better to watch this one for dips.

🚨 Click here to analyze GRBK or add it to your watchlist.

Building material suppliers may be a better value right now, and they’re also likely to benefit as a result of Harris’ focus on new home construction. More building projects mean increased demand for materials like lumber, siding, and plywood, providing tailwinds for companies in this space.

Builders FirstSource (NYSE: BLDR) manufactures and supplies building materials, manufactured components, and construction services to professional homebuilders, sub-contractors, remodelers, and consumers in the United States.

This one is still a consensus strong buy according to top Wall Street analysts:

🚨 Click here to see analyst price targets for BLDR.

The stock is already up on rate cut hype, as evidenced by the 5-day chart:

Chart courtesy TradingView

But it could go higher. Keith Hughes, a top 1% analyst for Truist Securities, foresees up to 13% additional upside for BLDR in the next year. He predicts that 2025 brings an uptick in single-family home construction because of dropping borrowing rates. Further, the lumber industry has hit rock bottom following the current downturn, the analyst told investors.

Because of the continued low inventory of existing homes, Hughes predicts a multi-year housing boom, with new single-family homes seeing the most growth. According to the analyst, BLDR is well-positioned to outpace the market thanks to its size and progress toward value-added products and digital offerings.

Overall: It’s still early days in the election race, but as Harris’ housing policies take center stage, these names and sectors are worth keeping an eye on.

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