Mortgage Rates are Going the Wrong Way. These Stocks Are Feeling It.

Rising mortgage rates are beginning to weigh on housing-related equities and broader market sentiment. The average 30‑year mortgage has climbed back above 6.5% after drifting lower earlier this year, linked to a surge in the 10‑year Treasury yield from 3.94% to 4.34% (about +40 bps) amid higher oil prices and inflation concerns. Futures now price no Fed rate cuts through 2026, and some Fed officials have flagged the possibility of further hikes if inflation accelerates. The result: homebuilder shares and home‑improvement retailers have underperformed — Lennar and PulteGroup fell double digits and high single digits over the past month, while Home Depot and Lowe’s dropped sharply — and the S&P 500 is down about 3.4% over the same period. A hotter-than-expected CPI print could deepen the selloff in housing-sensitive stocks.