"We estimate that KBH has a 29% exposure (by community count) and LEN a 21% exposure to Texas," wrote MKM Partners analyst Megan McGrath in the report. "We expect the companies to field questions about the health of the Texas market currently and their plans for community growth going forward given lower oil prices and a potentially shaky employment outlook for oil-dependent areas," she added.
The issue doesn't appear to have been a major concern for investors so far. While Brent crude prices are down more than 50% since July 25, KB Home shares have fallen just 6% over that time period while Lennar shares have risen by nearly 18%. The SPDR Homebuilders ETF (XHB) - Get Report , meanwhile, is up some 11% over the same time period.
The shares' resilience may be attributable to the fact that, so far at least, the Texas economy seems to be in good shape.
"Job growth, sales tax collections and building permits all signal that the Texas economy continues to outpace the national economy," states the weekly economic outlook on the Web site of state comptroller Glenn Hegar.