Housing market stocks give up gains as another jump in bond yields takes shine off strong data

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Shares of companies in the real estate services and home building space held support from their intraday highs on Tuesday, as more than a decade of growth in Treasury yields took away the early flashes of surprisingly strong economic data.

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Despite growing consensus that the housing market is in a recession, the US Commerce Department previously reported that new home sales in August rose 28.8% from a revised 532,000 in July to a seasonally adjusted annual rate of 685,000, while analysts on Wall Street surveyed by. The Journal was expecting a drop of up to 500,000 on average.

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Meanwhile, the yield on the 10-year Treasury note BX:TMUBMUSD10Y,
The benchmark for mortgage rates climbed 0.098 percentage points to 3.976%, the highest yield since April 2010. The coincident jump in mortgage rates has made homes less affordable and a slower purchase.

“With mortgage rates hitting new highs after September” [Federal Reserve] “August’s upside surprise in home sales is unlikely to be repeated,” said Bill Adams, chief economist at Comerica Bank.

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read also: ‘Housing market may undergo correction’: Freddie Mac says mortgage rates fall by 6.29%.

Real estate services company Redfin Corp. Stock of RDFN

It jumped up to 5.8% in intraday, before gaining 2.3% in afternoon trade in the wake of the data. That put the stock on track to end a record-tying eight-season losing streak, in which it fell 28.3% to close Monday at a record low.

Also in the real estate services sector, Zillow Group Inc. Z. shares of

ZG

Received 1.0%, Anywhere Real Estate Inc. HOUS

2.6% and Douglas Elliman Inc. DOUG

Up 1.0%, with shares that were pulling back from earlier gains of 3.6% to 5.9%.

RE/MAX Holdings Inc. Stock of RMAX

In recent trade, the intraday gain was reduced to 0.8% from 2.6% earlier.

Pullback in Shares Comes as S&P 500 Index SPX

Pulled an intraday U-turn, down 0.5% in afternoon trade, from 1.7% earlier.

Meanwhile, SPDR S&P Homebuilders Exchange Traded Fund XHB

Intraday gains of up to 2.1% led to a loss of 0.2%.

Among the home builders of the ETF, Lennar Corp. Stock of LEN

fell 0.6% but was up 3.0% at its intraday high.

Raymond James analyst Buck Horn reiterated the outperformance of the market for at least the past three years, raising his stock price target from $75 to $90. The new target implies an uptrend of TK% from the current levels.

Horn said that while he “can’t sugarcoat the tough period for new home sales” because housing affordability remains a “profound challenge” indefinitely, he believes Lenar will allow rapid price adjustments. Given its potential to take “significant” market share. and meaningful cost reductions, as well as pivoting quickly to single-family “build-for-rent” construction.

Elsewhere, PulteGroup Inc. PHM. shares of

fell 0.9%, KB Home KBH

Dropped 1.9%, DR Horton Inc. DHI

1.2% and Toll Brothers Inc.

A 0.9% drop, after all, was about 2% earlier in the session.

Among home improvement retailers, Home Depot Inc. hd. stock of both

and Lowes Companies Inc. LOW

were up 0.6%, but both were up around 3% at their intraday highs.

Credit: www.marketwatch.com /

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