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Beleaguered Homebuilder Stocks Hit by Wave of Analyst Downgrades

  • At least three research firms have cut their recommendations
  • Sector has plunged 43% this year as mortgage rates surge
Contractors work on homes under construction in Antioch, California.

Contractors work on homes under construction in Antioch, California.

Photographer: David Paul Morris/Bloomberg
Updated on

Analysts from Wells Fargo & Co. to Bank of America Corp. are cutting their ratings and share-price targets on homebuilders as surging mortgage rates and accelerating inflation erode the pandemic-era demand. 

The S&P Supercomposite Homebuilders Index slumped 14% this week, notching its worst drop since April 2020, as investor concerns deepened on the potential for a US recession amid surging mortgage rates and slumping housing starts.