12 Best Housing Stocks to Invest in According to Analysts

2. Forestar Group Inc. (NYSE:FOR)

Average Upside Potential: 53.70%

Forestar Group Inc. (NYSE:FOR) is one of the largest residential community developers in the United States which primarily acquires entitled real estate and develops it into finished residential lots for sale to homebuilders. Forestar is a majority-owned subsidiary of D.R. Horton.

Forestar’s strategic relationship with D.R. Horton, one of the largest American homebuilders, presents it with significant built-in demand for current and future lot deliveries. The firm is more geographically diversified than most homebuilders with active projects in 59 markets in 24 states and 95,100 lots controlled, as of September 30, 2024. Forestar successfully delivered over 15,000 residential lots during fiscal 2024 while recording a 1,078% increase in lots sold between FY 2018 and 2024.

As a highly differentiated, pure-play, residential lot developer for the affordably priced single-family home market, Forestar Group Inc. (NYSE:FOR) is demonstrating good operational execution and increased profitability. The firm closed fiscal 2024 with net income increasing 22% and revenues increasing 5%, year-over-year. Over the last five years, the firm invested nearly $6.7 billion in land acquisition and development and delivered more than 70,000 finished lots to local, regional, and national homebuilders. Simultaneously, its return on equity nearly tripled demonstrating meaningful value being delivered to its shareholders.