JPMorgan has downgraded Century Communities (CCS) from Neutral to Underweight, citing elevated inventory levels and weakening demand in the homebuilding sector. The move reflects growing skepticism about near-term profitability despite the company's strong regional presence.
- JPMorgan downgraded Century Communities (CCS) from Neutral to Underweight
- CCS’s absorption rate fell to 27 homes per month in Q3 2025, down 15% from prior quarter
- Average selling price (ASP) held steady at $528,000 despite rising input costs
- Mortgage rates exceeded 7.5% in Q3 2025, affecting buyer affordability
- JPMorgan forecasts up to 12% decline in CCS’s 2025 net income under current conditions
- The downgrade may influence trading in CCS and related segments of the homebuilding supply chain
Century Communities (CCS) has been downgraded to Underweight from Neutral by JPMorgan, marking a shift in the firm’s outlook amid challenging conditions in the U.S. residential construction market. The brokerage highlighted deteriorating demand signals, particularly in key markets such as Texas and Florida, where inventory growth has outpaced sales activity in the third quarter of 2025. The downgrade follows a broader trend of caution among financial institutions toward homebuilders, with CCS now facing increased scrutiny on its cost management and project pipeline. JPMorgan noted that CCS’s absorption rates declined by 15% quarter-over-quarter, reaching 27 homes per month on average across its active communities as of Q3 2025. This compares to a 32-home average in the same period last year, signaling a notable slowdown in sales velocity. Additionally, the company’s average selling price (ASP) has remained flat year-over-year at $528,000, despite rising material and labor costs. JPMorgan estimates that rising interest rates have constrained buyer affordability, with mortgage rates exceeding 7.5% in the third quarter, reducing the pool of qualified homebuyers. The firm projects that CCS’s 2025 net income could decline by up to 12% if current trends persist. The downgrade is expected to influence short-term trading activity in CCS, particularly among institutional investors and quantitative funds tracking equity research movements. The shift may also impact related sectors such as home improvement, lumber, and mortgage financing, where demand is closely tied to new construction activity.