Housing Starts and Permits: Starts Miss Expectations, While Permits Were Generally In-line

Research evidence excerpt

Housing Starts and Permits: Starts Miss Expectations, While Permits Were Generally In-line

June 16, 2026

Investment Conclusion

Homebuilders. The Homebuilder equities (ex NVR, FOR, & SDHC) trade at 1.1X our 2026 BV estimates, which

compares to a 1.45X average throughout the housing cycle. We forecast '26 ROA of 5.6%, which supports a ~1.3X

BV multiple based on historical correlations.

Building Products. The BP equities (ex QXO) are trading at 10.5X our 2026 EBITDA estimates and 17.6X on a P/E

basis (ex QXO), compared to the 11.0X and 19.9X respective historical averages.

Page 1 Text Continued

Building Products Impact & Completions: Starts Square Footage in May ‘26 decreased -8.2% YoY and -9.6% MoM.

The +0.3% 3-month average improved from -1.7% in April. NSA Units Completed decreased -15.8% YoY, while Units

Under Construction declined -7.1% YoY. New Residential accounts for ~25% of Building Products revenues on average.

Exhibit 1 - Housing Starts and Permits

Nationwide Housing Starts Nationwide Housing Permits

3,000

1980-Present 5/26 - Total 1,177 thous./Single-Family 882 thous. 3,000 1980-Present 5/26 - Total 1,413 thous./Single-Family 886 thous. Historical Avg: 2,500 Historical Avg:

1.35M 2,500 1.37M

2,000

1,500 (Thousands) 1,500 (Thousands)

SAAR 1,000 Units 1,000

500 500

0 0

1960196219641966196819701972197419761978198019821984198619881990199219941996199820002002200420062008201020122014201620182020202220242026 1960196219641966196819701972197419761978198019821984198619881990199219941996199820002002200420062008201020122014201620182020202220242026

100% Year Over Year Percent Change Year Over Year Percent Change

80% 100%

80%

60%

Chg 40% 40% Chg

% 20%

Y/Y 0% Y/Y 0%

-20% -20%

-40% -40%

-60%

Source: Wolfe Research, Census

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