I think one has trend carefully in these names, as a lot of people think they are easy shorts. I'm only using PHM, as the short interest is only around 5%.
shortsqueeze.com
-and they have considerable exposure to several markets I think are busting rapidly, Fl, AZ, and NV (about a third) as well as Calf.
idorfman.com
On your points:
1. even 4.75% will be enough to crunch them, with all the resets underway.
2. As I said, 5% housing softness, wipes out a fourth of their profit margin, 10% half, and I ultimately expect even more, in fact 10% is pretty baked.
3. Perhaps on this, but profit margins are smaller because they have higher % in G&A, they would have to cut back there.
4. Maybe, but just equal swaps to cut costs, doubt big premiums paid.
5. Already going on, buybacks are what's holding them up, but once the margins collapse, they will end them, no money. KBH and most others are very cash flow negative right now, capital intensive, and watch for tighter standards now more so than rates.
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