Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Hard-Hit Homebuilders Soar Most Since May 2020 on Inflation Data

Published 10/11/2022, 15:48
Updated 10/11/2022, 15:48
© Reuters.

© Reuters.

(Bloomberg) -- D.R. Horton Inc., Lennar Corp (NYSE:LEN). and other homebuilder companies’ shares are staging the biggest rally in more than two years as a slowdown in the pace of inflation fueled bets that the Federal Reserve will start dialing back the pace of its interest-rate hikes.

The S&P Supercomposite Homebuilding Index surged as much as 12%, the most intraday since May 2020, after a smaller-than-expected rise in consumer prices last month ramped up hopes that the central bank’s aggressive monetary policy tightening is reining in inflation. That sent Treasury yields tumbling, promising to pull mortgage rates back from the steep jump that’s weighed on the real estate industry.

Two of the largest builders in the US, Lennar and D.R. Horton, are both seeing the biggest one-day gain since early 2020, rising as much as 13% and 12%, respectively. Other gainers include Century Communities (NYSE:CCS) Inc., which is up as much as 16%, and KB Home (NYSE:KBH), rising by 14%. 

Homebuilders’ stocks have been slammed this year by a surge in mortgage rates, as the increased borrowing costs have eroded the affordability of their products and consumers’ demand. Mortgage rates data from Freddie Mac (OTC:FMCC) on Thursday morning showed the 30-year rate above 7%. 

Even after the gains, the S&P homebuilder index is still down about 27% this year.

©2022 Bloomberg L.P.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.