Homebuilder Stocks Set to Soar in a Harris Win

As the U.S. presidential election draws near, investors are keeping a close eye on the potential impact of a Kamala Harris victory on their portfolios. While the focus has been on sectors like renewable energy and technology, homebuilder stocks could also see a significant boost if Harris wins the election. Here's why these homebuilder stocks could outperform in a Harris win.


1. **Housing Shortage and Affordability:** The U.S. is facing a severe housing shortage, with a decade of underbuilding contributing to skyrocketing home prices and affordability issues. Harris' proposal to construct three million housing units addresses this shortage directly. By incentivizing homebuilders and expanding affordable rental housing tax incentives, Harris aims to boost housing supply and make homeownership more accessible. This increased demand for new homes could drive up homebuilder stocks, with companies like D.R. Horton (DHI), Taylor Morrison (TMHC), and LGI Homes (LGIH) potentially outperforming.
2. **Tax Incentives and Regulatory Changes:** Harris' plan includes tax incentives for homebuilders constructing starter homes for first-time homebuyers, as well as an expansion of the existing tax incentive for businesses building affordable rental housing. These incentives can lower the cost of construction and make it more profitable for homebuilders to focus on affordable housing. Additionally, Harris' plan to cut red tape and bureaucracy involved with new home construction can streamline the building process, further encouraging homebuilders to construct more affordable housing units. These regulatory changes and tax incentives could significantly benefit homebuilder stocks.
3. **Innovation Fund for Affordable Housing:** Harris has proposed a $40 billion innovation fund for affordable housing, which could significantly boost homebuilder stocks. This fund aims to support the construction of innovative, affordable housing units. Homebuilders like DHI, TMHC, and LGIH could benefit from this initiative, as it would increase demand for their services. Additionally, the fund could help these companies reduce construction costs by promoting innovative building techniques and materials. As a result, homebuilder stocks could outperform in a Harris win, driven by increased demand and lower costs.


In conclusion, a Harris win could have a significant positive impact on homebuilder stocks. Her proposals to address the housing shortage, expand tax incentives, and establish an innovation fund for affordable housing could drive demand for new homes and boost homebuilder stock performance. Investors should consider adding homebuilder stocks like DHI, TMHC, and LGIH to their portfolios in anticipation of a Harris win. However, it's essential to remember that individual stock performance can be influenced by various factors, and it's crucial to conduct thorough research and maintain a diversified portfolio.