10 Best Residential Construction Stocks to Buy

8. Tri Pointe Homes, Inc. (NYSE:TPH)

Number of Hedge Fund Holders: 37

Tri Pointe Homes, Inc. (NYSE:TPH) is one of the largest public homebuilding companies in the US. The home builder has been engaging in the construction of premium homes and communities with deep ties to the communities it serves.

Tri Pointe Homes, Inc. (NYSE:TPH) is a recognized leader in innovative design, energy efficiency, customer experience, and environmentally friendly business practices. TPH serves as a growth company with national reach and local market expertise in addition to a seasoned leadership team known for operational excellence. In 2024, the homebuilder achieved different milestones such as delivering a record-high 6,460 new homes and a 40% rise in diluted earnings per share year-over-year, while closing the year with the strongest balance sheet and liquidity ever.

However, the homebuilder faces challenges from housing affordability and elevated mortgage rates which also resulted in softer seasonal sales in the last part of 2024. The stock was recently downgraded by RBC Capital from Outperform to Sector Perform, based on near-term market headwinds as well as higher promotional incentives and rising land costs pressuring the company’s gross margin. As of the recent fourth quarter 2024 earnings, the firm remained positive for the spring selling season as Tom Mitchell, the President and Chief Operating Officer, said:

‘We are confident that strong long-term fundamentals, including both favorable demographics and the ongoing supply and demand imbalance, position Tri Pointe Homes and our industry for ongoing success ‘