Homebuilding Stocks Slide as Mortgage Rates Hit 7.5%

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3▲0 ▼4Impact / 5
Summary · why it matters

Homebuilding and home improvement stocks are heading for a bruising September as mortgage rates climb back to 7.5%. The S&P 500 Homebuilding Index has fallen 3.2% so far this month, pressured by the rapid run-up in mortgage rates and slumping revenues at Lennar and KB Home. Retailers are faring worse: Home Depot shares have slid 11% this month and Lowe's has dropped 8.5% as building activity slows and renovators shift to smaller, cheaper products. Mortgage rates have surged more than half a point in two weeks, and on Monday the average rate on a 30-year fixed-rate loan touched 7.5% for the first time since April of 2024. After briefly falling below 6% early this year, rates were pushed higher by the war in Iran and accompanying inflation, dampening sales and keeping homebuyers sidelined.

Impact on assets 4

Consumer Discretionary▼ · 4 stocks
The Home Depot Inc
HD
▼ NegativeDemandrelevance

Home Depot shares slid 11% this month as slowing building activity and renovators shifting to smaller, cheaper products hit demand.

Lowe's Companies Inc
LOW
▼ NegativeDemandrelevance

Lowe's dropped 8.5% this month as slowing building activity and a shift to smaller, cheaper renovation products weigh on demand.

KB Home
KBH
▼ NegativeDemandrelevance

KB Home is cited for slumping revenues amid the mortgage-rate surge that is keeping homebuyers sidelined.

Lennar Corporation
LEN
▼ NegativeDemandrelevance

Lennar is cited for slumping revenues as mortgage rates climbing to 7.5% dampen home sales.

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