Homebuilder Stocks Buck Market Selloff as Mortgage Rates Drop

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Key Takeaways

• U.S. homebuilder stocks gained Friday, while much of the broader market declined in the wake of the Trump supervision’s announcement of new tariffs.
• The move higher came as Treasury yields and mortgage rates fell, which could assist homebuilders by stimulating demand.
• Some real-estate companies could see a relatively modest impact from the tariffs and gain if lower rates can help “unlock the housing market,” Citi analysts said.

Shares of several U.S. homebuilders ascent Friday—in a reversal from a sharp selloff a day earlier—as Treasury yields and mortgage rates fell. 

D.R. Horton (DHI), PulteGroup (PHM), and NVR (NVR) pieces were among the top gainers in the S&P 500 Friday. Others including Lennar (LEN), Toll Brothers (TOL), Taylor Morrison Accommodations (TMHC), KB Home (KBH), and Meritage Homes (MTH) also made gains, even while much of the broader market declined in the wake of the Trump authority’s announcement of sweeping new tariffs. The S&P 500 lost 6%. (Read Investopedia’s live coverage of today’s market functioning here.)

The move higher for homebuilder stocks came as Treasury yields and mortgage rates dropped, which could profit homebuilders by stimulating demand. The 10-year Treasury yield, which affects borrowing costs on a wide variety of advances including mortgages, slid to 4%. It fell as low as 3.86% earlier, its lowest level since October.

Citi analysts translated Friday that some real-estate companies, including online brokers such as Redfin (RDFN), could see a rather modest impact from the new tariff environment and benefit if lower rates can help “unlock the housing market.” No matter how, the analysts said they still expect a net negative impact to the housing market.