Drop in Housing Starts Hammers Builder Stocks -- WSJ

Dow Jones04-16

By Ryan Dezember

Shares of homebuilders and building products firms are tumbling after the Census Bureau's tally of housing starts showed a big decline in March.

Housing starts fell 14.7% from February to a seasonally adjusted annual rate of 1.47 million, a bad sign heading into the spring building season that suggests mortgage rates' recent climb toward 7% is taking a toll on demand. Analysts had expected a 2.4% increase in starts.

Real-estate stocks are leading the S&P 500 lower and are now down more than 10% this year as a group, the laggards by far in the broad index.

It has been a sharp reversal for shares of homebuilders and companies that manufacture and distribute building products. Over the past year, shares of companies like PulteGroup, Boise Cascade and Builders FirstSource have have had some of the hottest stocks this side of artificial intelligence.

The decline in housing starts, however, suggests that investors may have been too optimistic when they sent many of these shares up by 100% or more over the past year and that the builders and their suppliers will need interest rates to decline before there is enough building activity to justify lofty shares prices.

This item is part of a Wall Street Journal live coverage event. The full stream can be found by searching P/WSJL (WSJ Live Coverage).

(END) Dow Jones Newswires

April 16, 2024 11:15 ET (15:15 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.

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Analysts had expected a 2.4% increase in starts. \n</p>\n<p>\n     Real-estate stocks are leading the S&amp;P 500 lower and are now down more than 10% this year as a group, the laggards by far in the broad index. \n</p>\n<p>\n     It has been a sharp reversal for shares of homebuilders and companies that manufacture and distribute building products. Over the past year, shares of companies like PulteGroup, Boise Cascade and <a href=\"https://laohu8.com/S/BLDR\">Builders FirstSource</a> have have had some of the hottest stocks this side of artificial intelligence. \n</p>\n<p>\n     The decline in housing starts, however, suggests that investors may have been too optimistic when they sent many of these shares up by 100% or more over the past year and that the builders and their suppliers will need interest rates to decline before there is enough building activity to justify lofty shares prices. \n</p>\n<p>\n     This item is part of a Wall Street Journal live coverage event. 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