The housing market may be cool, but builder stocks were hot on Friday. Homebuilder stocks were having their best day since this summer as expectations that the Federal Reserve will cut interest rates changed.
Two exchange-traded funds, the iShares US Home Construction ETF and the State Street SPDR S&P Homebuilders ETF, rose 5.7% and 5.4%, respectively, in afternoon trading. Both were on track for their biggest percentage gain since July 22, according to Dow Jones Market Data.
It’s been a tough year for the industry, which has been dealing with skittish homebuyers who have turned away from the housing market because of high rates and prices, as well as increased competition from owners of existing homes who are selling. The iShares ETF is down 4.2% this year, while the State Street fund is up 0.3%.