BUZZ-U.S. homebuilders tumble as rate cut bets decrease after Powell's comments
Shares of U.S. homebuilders fell sharply on Wednesday following comments from Fed Chair Powell, indicating no imminent decision on rate cuts. Market expectations for a rate cut in September have dropped below 50%, contributing to rising U.S. 10-year yields. Higher yields may lead to increased mortgage rates, making homes less affordable. The PHLX Housing Index declined over 2%, with significant losses for major homebuilders like DR Horton, Lennar, and Pultegroup, as well as building products maker Builders FirstSource and home improvement retailers Home Depot and Lowe’s.
Shares of U.S. homebuilders slide on Weds after Fed chair Powell says no decision yet on rate cuts
Markets now pointing to odds dropping below 50% that the Fed will cut rates at its next meeting in Sept, as benchmark U.S. 10-year yield (US10YT=RR) extends rise (US/)
Rising yields can potentially lead to higher mortgage rates, which could negatively impact homebuilders by making homes less affordable for consumers PHLX Housing Index (.HGX) dropping >2% on the session Among biggest HGX fallers are: DR Horton (DHI.N) >2%, Lennar (LEN.N) nearly 3%, Pultegroup (PHM.N) >3% In S&P 500 (.SPX) , building products maker Builders FirstSource (BLDR.N) down 5%, and home improvement retailers Home Depot (HD.N) and Lowe’s (LOW.N) both off nearly 2%
With moves on Weds, (Lance Tupper is a Reuters market analyst. The views expressed are his own)
