Housing Shares Take a Hit Amid Pessimistic Forecasts and Trump’s Rejection

US Housing Market Stocks Take a Hit

Shares tied to the US housing sector saw sharp declines on Wednesday, as investors reacted to disappointing forecasts from companies like Lowe’s and noted the absence of new housing policy announcements in President Donald Trump’s State of the Union address.

The S&P composite homebuilder index dropped by up to 5.2%, marking its steepest fall since the market turmoil linked to tariffs last April. Leading the losses were companies such as Green Brick Partners, Lennar, Champion Homes, Dream Finders Homes, Installed Building Products, DR Horton, and TopBuild. Mortgage-focused firms like Rocket Cos also experienced declines.

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Lowe’s projected annual sales that failed to meet analysts’ expectations, signaling continued weakness in the housing market. This followed similar caution from Home Depot, which warned of ongoing economic headwinds. Lowe’s shares slid as much as 5.4% during the session.

Many investors had anticipated that President Trump would announce measures to stimulate the housing sector in his address. Instead, he briefly mentioned the possibility of restricting institutional purchases of single-family homes and offered limited discussion on housing affordability, according to Citi analyst Anthony Pettinari.

Bloomberg Intelligence’s Drew Reading noted, “There was hope for new government support for the housing market, but the speech mainly revisited falling interest rates and repeated the idea of banning institutional home ownership.”

President Trump also appeared to delegate the issue of housing affordability to the Federal Reserve, stating, “Lower interest rates will solve the Biden-created housing problem, while at the same time protecting the values of those people who already own a house that really feel rich for the first time in their lives.”

Earlier in the week, Home Depot’s CFO Richard McPhail commented that while homeowners remain a strong customer group, they are increasingly worried about housing affordability and potential job losses amid growing uncertainty.

Lowe’s CEO Marvin Ellison echoed these concerns, noting that consumer confidence is still low due to inflation and broader economic uncertainty. He also pointed to elevated mortgage rates, which are keeping homeowners from moving, and a slowdown in new home construction.

Additional Market Declines

Other building-related stocks also fell, with the S&P Composite 1500 Building Products Index dropping as much as 2.5%. The steepest losses were seen at Hayward Holdings, UFP Industries, and Builders FirstSource.

Reporting assistance by Katy O'Donnell.

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