Home-builder Stocks Are Springing Leak
This morning, most of the leading home-builder stocks are giving up the early morning gains made at the start of the trading day. Recently, the leading home-builder stocks have been rolling over on the daily charts once interest rates began to rise. Since early May 2013, the yield on the 10-year U.S. Treasury Note has surged by more than a full point. This higher bond yield has also caused the interest rate on the 30-year mortgage to soar to 4.65 percent. Last month, qualified home buyers were able to get a 30-year mortgage around 3.50 percent, so it is easy to see how a surge in yields could slow down the important housing market.
Today, leading home-builder stocks such as Toll Brothers Inc. (NYSE:TOL), KB Home (NYSE:KBH),
Lennar Corporation (NYSE:LEN), and D.R. Horton, Inc. (NYSE:DHI) have all turned negative on the trading session. Many traders and investors can make a case that the housing recovery is the primary catalyst for any economic recovery in the United States. After all, just look at the recent strength in stocks such as The Home Depot, Inc. (NYSE:HD), Mohawk Industries, Inc. (NYSE:MHK), Lowe's Companies, Inc. (NYSE:LOW), and many others. If the home-builder sector starts to slow down this entire bull market could quickly come to an end.
Short term day traders can watch for intra-day chart support on Lennar Corp (LEN) around the $32.85, and $32.00 levels. LEN stock is considered to be one of the most important home-builder stocks that any trader can follow.