NEW YORK (AP) — Homebuilder stocks fell on Monday as sales of previously occupied U.S. homes posted a surprising drop in June.
The National Association of Realtors said Monday that sales declined 1.2 percent in June from an annual rate of 5.14 million in May. The level is still near a 3½-year high, but investors may have been looking for more because the spring and summer are traditionally considered the peak home selling season. Sales of previously occupied homes in June reflect contracts that were mostly signed in April and May.
Investors may also be concerned about home sales slowing because mortgage rates are on the rise. Mortgage rates have surged in recent weeks over concern that the Federal Reserve could slow its bond-buying programs later this year. The Fed's bond purchases have helped keep long-term mortgage and other rates low.
Still, mortgage rates remain relatively low and home prices remain affordable despite rising in the past year. And higher mortgage rates could encourage some potential buyers to come off the sidelines and purchase homes before rates rise further.
Here's how some homebuilders are faring in afternoon trading:
KB Home shed 34 cents to $18.76.
Toll Brothers Inc. slipped 22 cents to $33.89.
PulteGroup Inc. fell 28 cents to $19.08.
Lennar Corp. dropped 48 cents to $35.05.
Hovnanian Enterprises Inc. fell 11 cents to $5.66.
D.R. Horton Inc. declined 33 cents to $21.74.