Optimism is high for many sectors of the US economy in 2025 but homebuilders are one area that has declined since the election. That coincides with better economic data since September and rising 30-year bond yields.
There is a psychological barrier of 7% that scares US homebuyers and we are dangerously close to that now.
Housebuilders can accept lower margins and that is happening slowly now but there is some trust and nobody likes to see house prices fall. This is a dynamic worth watching as it is a large part of the economy and has been growing for some time. Much of the buying in the past two years was dependent on falling rates later on but that doesn't look so likely anymore.
US Home Builder ETF, daily
