Homebuilder Stocks Surge on Fed Rate Cut Expectations
Homebuilder stocks rallied sharply Friday as traders increased bets on a December rate cut following dovish comments from Federal Reserve Bank of New York president John Williams. The SPDR S&P Homebuilders ETF (XHB) climbed 4.2% as market-implied odds of a December cut jumped to 70% from 39% Thursday.
Builders FirstSource, D.R. Horton, and KB Home led gains with 7% advances, while Lennar rose 6%. The sector's rally reflects growing conviction that lower mortgage rates could revive housing demand after this year's affordability crunch. Williams' remark about "room for adjustment in the NEAR term" suggests policymakers may act sooner than expected to support economic growth.
Real estate-adjacent stocks like Zillow and Rocket Companies also benefited from the shift in rate expectations. The Fed's December 10-11 meeting now looms as a potential inflection point for housing-sensitive assets across traditional and crypto markets.
