Sep. 18 at 12:42 PM
BofA analysts said the Fed’s latest 25-bp rate cut is unlikely to shift the U.S. housing market in the near term, noting mortgage rates were “relatively unchanged” and homebuilder stocks reversed early gains. They argued both had already priced in recent rate declines.
Since June, U.S. homebuilder and building-products stocks have risen as 30-year mortgage rates fell, though new-home demand has only stabilized at subdued levels and remodeling activity improved modestly. BofA expects demand to strengthen with lower rates but stressed the extent will matter.
The bank raised homebuilder price targets by an average of 8% and reiterated “Buy” ratings on Meritage Homes, NVR, PulteGroup, Taylor Morrison, and Toll Brothers. Mortgage rates averaged 6.35% this week, the lowest in nearly a year, with BofA forecasting 6.05–6.10% by late 2025 and a potential path toward 5% if affordability pressures force more aggressive policy easing.
$MTH $NVR $PHM $TMHC $TOL