Mortgage Rates Climb Above 6.5% Again, Dragging Down Homebuilder and Home Improvement Stocks

Lennar and PulteGroup have lost 14.3% and 8.9% of their value over the past month. Home Depot and Lowe's have also fallen 11% and 8.5%, respectively. These declines are directly linked to a 40-basis-point increase in the 10-year Treasury yield to 4.34%, which has pushed the 30-year fixed-rate mortgage back above 6.5%. The rise in mortgage rates is a function of inflation concerns, primarily from surging oil prices. The futures market now prices in zero Federal Reserve rate cuts through the end of 2026, and some officials are suggesting a rate hike may be on the table if inflation continues to climb.