Builder Stocks Surge Amid Expectations of Fed Rate Cut
The housing market might be cool, but builder stocks were hot on Friday. Home builder stocks were having their best day since this summer as expectations that the Federal Reserve will cut interest rates shifted.
ETFs See Significant Gains
Two exchange-traded funds, the iShares U.S. Home Construction ETF and the State Street SPDR S&P Homebuilders ETF, were up 5.7% and 5.4%, respectively, in afternoon trading. Both were on pace for their largest percentage increase since July 22, according to Dow Jones Market Data.
Challenges Faced by the Industry
It’s been a tough year for the industry, which has been contending with skittish home-buyers put off from the housing market by high rates and prices, as well as more competition from existing-home owners selling. The iShares ETF is down 4.2% this year, while the State Street fund is up 0.3%.
