Homebuilder stocks crumble as mortgage rates surge and as home buyers retreat
Shares of homebuilders took a broad beating Thursday, as mortgage rates kept rising to a 23-year high, and prompting more home buyers to back off. The iShares Home Construction ETF (ITB) dropped 5.2% toward a four-month low in afternoon trading, the biggest one-day drop in 13 months, with all 46 equity components losing ground. Among the more-active homebuilders, shares of D.R. Horton Inc. (DHI) sank 6.3% toward a six-month low, of Lennar Corp. (LEN) shed 5.7%, of Toll Brothers Inc. (TOL) slumped 6.7% and PulteGroup Inc. (PHM) slid 5.9%. Home improvement retail giant Home Depot Inc.'s stock (HD) lost 2.4%, to put it on track for the lowest close since June 1. The 30-year fixed-rate mortgage averaged 7.57% as of Oct. 12, the highest rate since December 2000. And real estate services company Redfin Corp. (RDFN) said while new home listings for the four weeks ended Oct. 8 fell 3.9% from a year ago, the smallest decline in 15 months, buyers are "retreating" as mortgage-purchase applications were near their lowest levels in nearly 30 years. Redfin's stock was down 6.1% at a nine-month low. The home construction ETF has tumbled 14.1% over the past three months, while the S&P 500 has eased 3.3%.
-Tomi Kilgore
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10-12-23 1422ET
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