Home Builder Stocks Rally. Charts of Pulte, CRH, Cemex Point to Further Upside

A home under construction in Rancho Cordova, Calif. (David Paul Morris/Bloomberg)

Key Points

• The iShares U.S. Home Construction ETF gained 3% yesterday.
• PulteGroup is showing relative strength compared to peers.
• International building materials companies like CRH and Cemex are also performing strongly.

The recent pullback in the 10-year Treasury yield has provided relief to rate-sensitive sectors, propelling home builder stocks higher amid renewed optimism for a housing market rebound.

Toll Brothers jumped more than 4% yesterday, while the iShares U.S. Home Construction ETF gained 3%, completing a bullish morning star pattern after a 16% correction from an earlier peak in September. The ETF also bounced cleanly off its 200-day simple moving average and the key $100 level, a solid technical development. The 10-year yield has declined six of the past eight weeks and a bear flag formation now suggests a potential move toward 3.65% if it breaks below 4%. With this week’s lows establishing clear risk parameters, investors may find selective opportunities as home builder and periphery plays regain momentum heading into year-end.

The iShares U.S. Home Construction ETF was trading at $103.76 Wednesday.

The home builder ETF bounced at a critical area, which is a good sign going forward.

PulteGroup, a pure-play home builder and the third-largest holding in the iShares U.S. Home Construction ETF, is up 15% year to date and pays a 0.7% dividend yield. The stock has dropped four of the past five weeks, including a 13% decline last week, yet shows relative strength trading just 16% below its 52-week high. Peers D.R. Horton and Lennar are down 20% and 33%, respectively, from their own annual peaks. Technically, Pulte Group remains constructive as its 200-day simple moving average that began sloping upward in mid-August, reflecting a strengthening secular trend. The stock is now carving out a potential double bottom with a key pivot at $138.43. That base began forming after a Sept. 5 gap-fill from Oct. 21, 2024, and Tuesday’s action completed a bullish morning star reversal. An entry here appears favorable, with a clear bullish thesis intact above $118.

PulteGroup was trading at $125.49 Wednesday.

PulteGroup stock put in a strong Tuesday session.

Looking internationally, Dublin-based CRH is a global building materials company whose stock shows strong technical aspects. Often considered a periphery play on the housing sector, the stock is trading just 1% below its all-time high, up 27% year to date, and offers a 1.2% dividend yield. A bullish ascending triangle formed between March and August at the very round $100 level supplied the breakout trigger. The stock surged 10% on Aug. 7 after a strong earnings report, marking its best single-day volume in six months. As leading stocks often do, it’s presenting an add-on buy point above a bull flag pattern. Traders should consider entering above the $121 trigger, with an eye toward a potential move to $145 by year-end. Maintain a bullish view while the stock holds above $114.

CRH was trading at $119.75 Wednesday.

CRH, a standout among building materials stocks, should continue its run higher.

Cemex , the Mexican cement company and like CRH an international periphery play, is delivering a standout performance in 2025. The stock is up 73% year to date with a 0.9% dividend yield. Since bottoming in early April, it has nearly doubled, rising in 20 of the past 27 weeks, and is up another 7% this week. Momentum has been strong with a bull flag breakout above a $7 trigger in early July following an earlier move through a $6.43 double bottom pivot on May 8. Now hovering near a cup base trigger at $9.72, Cemex is attempting to decisively break out of single-digit territory. The stock’s tight, orderly trading behavior, marked by low volatility and constructive price action, is a classic bullish signature. A breakout here could open the path toward $11 by year-end, with a bullish stance justified while shares hold above $8.75.

Cemex was trading at $9.79 Wednesday.

Cemex’s very tight trading range bodes well for this uptrend continuing into year end.

Write to Doug Busch at douglas.busch@barrons.com