Rising mortgage rates drag US housing stocks down

President-elect Donald Trump's victory pushed up the yield on the 10-year US Treasury bond. In contrast, housing stocks, construction companies and building materials all fell sharply.

Houses in the southern suburbs of Chicago - Photo: CNBC

The average interest rate for a 30-year fixed mortgage rose 9 basis points to 7.13% on Nov. 6. That's the highest rate since July 1 of this year, but not the increase some had expected, according to an analysis by Mortgage News Daily.

Interest rates spiked again with a Trump victory, according to Matthew Graham, chief executive of Mortgage News Daily. Going into the election, bond traders were expecting interest rates to rise even higher in the event of a Trump victory.

In contrast, housing, utilities and building materials stocks all fell sharply. Shares of retailers Home Depot and Lowe's each fell more than 3%.

"Builder stocks are very sensitive to mortgage rates and mortgage rate expectations," said John Burns, CEO of John Burns Real Estate Consulting.

“Inflation expectations are higher now, which is having an impact on long-term interest rates,” added John Burns.

While Mr. Trump has not offered a detailed housing plan, he has talked about deregulation and opening up federal land for more housing.

The National Association of Home Builders congratulated the president-elect and looked forward to working with the Trump administration and leaders in Congress to enact a legislative and housing agenda.

Existing home sales saw an unusual surge this fall.

Pending sales, which represent signed contracts, rose 7% in September from August, according to the National Association of Realtors. But that was before prices rose significantly.

Sales were up largely due to increased supply. According to Realtor.com, there were 29.2% more homes for sale in October than in October 2023, reaching the highest active inventory since December 2019.

“The path ahead is unpredictable and will ultimately be determined by inflation, the economy and Treasury issuance,” Graham added.

Source: https://tuoitre.vn/lai-suat-the-chap-tang-cao-keo-co-phieu-nha-o-my-giam-manh-20241107171012366.htm