Home-builder stocks fall as lowest affordability in 4 decades offsets upbeat sales data

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CoStar CEO says property markets among the worst in decades as rising interest rates sap demand

The home-builder sector suffered a broad selloff Wednesday as a rise in Treasury yields, which highlighted concerns over generationally low housing affordability, offset data showing a big beat in new-home sales.

The selloff comes despite the U.S. Commerce Department reporting that sales of newly built homes surged 12.3% in September to an annual rate of 759,000 homes, the highest level since February 2022 and well above expectations of an annual sales rate of 680,000 homes. Rising Treasury yields lead to higher mortgage rates, which have reached the highest levels in decades, making homes less affordable.

Within the home-builder ETF, Owens Corning’s stock OC, -9.25% was the biggest decliner, as it tumbled 9.2% toward a near five-month low and the worst one-day performance in more than three years.

 

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