Homebuilder stocks surged in July, driven by a cooler-than-expected June inflation report, which raised hopes for significant mortgage rate drops in 2023.
Lower mortgage rates could entice sidelined homebuyers back into the market, boosting the outlook for homebuilders who have been offering incentives to sell inventory.
Despite recent dips in homebuilder stocks, the coming interest rate cuts suggest potential for significant investor interest, making this an intriguing time for buyers.
The current market sentiment implies a likely 100 basis point cut by year-end, which is anticipated to substantially affect mortgage rates and homebuilder stock performance.
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