Unlike the rest of the stock market, stocks from some of the country’s largest builders dropped yesterday amid COVID-19 vaccine news. Pfizer announced positive results from its early trial of a potential COVID-19 vaccine, giving hope to Americans that a future of normalcy may be within reach. For builders, though, CNBC says the home building industry has benefited so far from stay-at-home orders, telecommuting, homeschooling, and the “urban exodus.” Lennar, Pulte, DR Horton, Toll Brothers—even Home Depot and Sherwin Williams—all took hits to their stocks yesterday. Mortgage rates play a role as well. Since hitting a new low last week, rates appear to be turning around, according to CNBC.
Part of that also has to do with mortgage rates, which set yet another record low last week but appeared to be turning around Monday with a sell-off in the bond market. Mortgage rates follow loosely the yield on the 10-year U.S. Treasury, which surged to the highest level since March.
“Bond weakness is starting to snowball in a way we haven’t seen since the crazy volatility in March, and this time around there are no concerns about liquidity and smooth market functioning,” said Matthew Graham, chief operating officer at Mortgage News Daily. “That makes the current move very serious.”