Forestar Group Inc. (FOR) in Arlington, Tex., is a residential lot development company that is focused primarily on selling finished single-family residential lots to homebuilders. It operates through its real estate segment, acquiring land and developing infrastructure for single-family residential communities and selling residential single-family finished lots to local, regional, and national homebuilders.
On the back of record-low mortgage rates, housing demand has skyrocketed in the last two years. Home prices have surged due to robust housing demand and low inventory. According to Freddie Mac, home sales are expected to hit 6.90 million this year and 7 million in 2023. However, because mortgage rates are now climbing, FOR’s near-term prospects look uncertain despite its sound financials.
