Homebuilder stocks take a broad beating after jobs data sends Treasury yields to fresh 16-year highs

Shares of homebuilders were taking a broad beating Friday, after the stronger-than-expected jobs data sent Treasury yields to fresh 16-year highs, making new homes less affordable. The iShares U.S. Home Construction ETF (ITB) sank 1.2% toward a four-month low, with 43 of 46 components losing ground. Among the more-active homebuilder components, shares of D.R. Horton Inc. (DHI) declined 0.8%, of Lennar Corp. (LEN) lost 0.9%, of PulteGroup Inc. (PHM) fell 1.7% and of KB Home (KBH) gave up 2.3%. Home improvement retailer Home Depot Inc. (HD) is also a component, and the stock fell 1.3%. Mortgage rates are based on the yield of the 10-year Treasury note (BX:TMUBMUSD10Y), and that yield jumped 0.120 percentage points to 4.837%, toward the highest closing yield since Aug. 8, 2007. And the yield on the 30-year Treasury bond (BX:TMUBMUSD30Y) leapt 0.121 percentage points to 5.007% toward the first close above the 5% threshold since Aug. 15, 2007. The homebuilder ETF has tumbled 15.9% since closing at a record $89.31 on Aug. 1, while the 10-year Treasury yield has increased 0.786 percentage points over the same time and the S&P 500 has lost 7.6%.

-Tomi Kilgore

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10-06-23 1027ET

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