Investor Steve Eisman has articulated that the recent initiative by President Donald Trump to lower mortgage borrowing costs through a sizable $200 billion purchase of mortgage-backed securities may trigger an appreciable, albeit potentially transient, uplift in the stock prices of U.S. homebuilding companies. Speaking on the Real Eisman Playbook podcast, Eisman conveyed optimism that, despite a rally observed among homebuilder shares last Friday, further gains remain plausible.
Identifying standout opportunities within the sector, Eisman pointed to two prominent homebuilders: Lennar Corporation (NYSE: LEN) and D.R. Horton Inc. (NYSE: DHI). Both companies endured substantial stock depreciation throughout 2025 but have started trending upward in 2026 in response to easing mortgage rates and their comparatively low valuations. Mortgage rates have decreased to approximately 6 percent, and Eisman anticipates that if this figure falls further, potentially to around 5.5 percent, there could be a corresponding improvement in the volume of both existing and new home sales.
From a market capitalization perspective, these companies present intriguing potential. D.R. Horton, the larger of the two, holds a market cap nearing $45 billion. Eisman suggested that the undervaluation within these stocks could precipitate a more rapid and significant price increase than generally expected, metaphorically describing the endeavor as akin to "threading an elephant through a needle." This analogy captures the complexity and scale of the anticipated market movement juxtaposed with its surprising feasibility.
However, Eisman also cautioned against overestimating the long-term impact of the mortgage package on broader housing market issues. Crucially, he underscored that persistent supply-side challenges are entrenched primarily at the local regulatory level. These regulations often hamper and escalate the cost of constructing smaller residential units, constraining new housing availability irrespective of financing adjustments.
The performance trends within the housing sector provide empirical context to Eisman’s observations. Following a difficult 2025 marked by declining homebuilder stock prices—attributable to factors such as elevated interest rates, tariffs, and stringent immigration policies—the sector is witnessing a promising start to 2026. Key stock and exchange-traded fund (ETF) performances offer insight into these developments:
- Lennar Corp. (NYSE: LEN) experienced a 16.06 percent decline in 2025 but has gained approximately 13.79 percent year-to-date.
- D.R. Horton Inc. (NYSE: DHI) posted a modest 3.87 percent increase over the prior year and continues to appreciate, showing a 7.03 percent advance in 2026 so far.
- The iShares U.S. Home Construction ETF (BATS: ITB) saw a 6.11 percent drop in 2025 but has rebounded with a 10.70 percent rise this year.
While the iShares US Home Construction ETF does not score highly on momentum metrics according to Benzinga’s Edge Stock Rankings, the ETF displays favorable price trends across short, medium, and long-term horizons. This mixed analytic perspective suggests nuanced market dynamics where recovery potential coexists with underlying volatility.
In sum, Eisman’s analysis presents a cautiously optimistic outlook. The mortgage-backed security purchases proposed by President Trump could lower borrowing costs sufficiently to foster a rebound in home sales, positively influencing key homebuilder stocks. However, the structural impediments to housing supply—chiefly from local regulations—may temper the sustainability of this rally. Investors should consider these factors carefully when evaluating exposure to the residential construction industry in the near term.