Homebuilders still have a lot going for them as inventory levels subside, creating a potential need for home construction in various markets.
But the rising rate environment is having an impact on homebuilder stocks, even if its not exactly a death knell for improvements in the sector.
Investorplace has more on how rising Treasury yields are impacting builders:
Since the homebuilders topped in May, the XHB is roughly 9% lower; Treasury yields have rallied roughly 35% during the same time period. To be sure, the higher-rate environment is not only weighing on the homebuilders, but across the spectrum of interest-rate-sensitive instruments. Eventually, this also will hit the broader stock market, although beyond the medium-term, rising rates and a strong dollar are positive signs for the economy.
