Wall Street Expects Homebuilders’ Shocking 2023 Rally to Continue Into Next Year
- Shares are up 79% this year, outpacing S&P 500’s 24% gain
- Rate sensitive sector well positioned in 2024, Ken Zener says
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Homebuilder stocks are on pace for their biggest annual advance in over a decade, a remarkable feat considering how rising interest rates sent mortgage rates soaring in 2023. Now that bond yields are coming down, Wall Street expects that rally to carry over into 2024.
When rates climb, homebuilders typically feel the pinch. This year was an anomaly as tight inventory coupled with insatiable demand outweighed high borrowing costs. As a result, shares of homebuilders soared, with the group on track to finish 2023 at a record high. The sector is up 79%, far surpassing the S&P 500 Index’s 24% gain.