In the first week of December 2018, stock for luxury home builder Toll Brothers decreased 4.6 percent in premarket trading, attributed to its underwhelming first quarter guidance.
Toll Brothers' chairman and CEO Douglas Yearley said in a statement that the market softening in November 2018 is due to rising interest rates and "the effect on buyer sentiment of well-publicized reports of a housing slowdown." Current U.S. Census data show that new-home sales have been in decline for 11 consecutive months. In October 2018, new-home sales dropped 12 percent annually, and economists cite dwindling affordability in the nations housing markets as a primary driver, CNBC reports.
Toll Brothers beat top and bottom line estimates for its fourth-quarter earnings report. Two of the homebuilder's key metrics, deliveries and backlog, were at the highest levels in more than a decade.
Lawrence Yun, chief economist for the National Association of Realtors, said in November that "this time, interests rates are not going down. In fact, they are probably going to increase even further," added Yun.