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Takeaways
- U.S. homebuilder stocks gained Friday, while much of the broader market declined in the wake of the Trump administration's announcement of new tariffs.
- The rise in Treasury yields and mortgage interest rates could stimulate demand for homebuilders.
- Citi analysts said that some real-estate firms could benefit from lower rates if they can “unlock” the housing market.
Shares of several U.S. homebuilders rose 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) shares were among the top gainers in the S&P 500 Friday. Lennar(LEN), Toll Brothers(TOL), Taylor Morrison Home(TMHC), KB Home(KBH), and Meritage HomesMTH) all made gains as well, despite the broader market declining in the wake the Trump Administration’s announcements of sweeping new Tariffs. The S&P 500 lost 6%. (Read Investopedia’s live coverage of today’s market action here.)
Homebuilders could benefit from the drop in mortgage rates and Treasury yields. This could stimulate demand. The 10-year Treasury rate, which affects borrowing rates on a wide range of loans including mortgages slid to just 4%. It dropped as low at 3.86%, its lowest level in October.
Citi analysts said on Friday that some real estate companies including online brokers, such as Redfin, could see a modest impact from a new tariff environment. They may also benefit if the lower rates help “unlock” the housing market. Analysts said that they still expect the housing market to have a net negative effect.
