Rising interest rates has pushed homebuilder companies stock prices to react, according to a report.
An index tracking the stocks for the top US homebuilders fell for four straight days, since Federal Reserve chairman Ben Bernanke made his speech that the Fed may slow mortgage bond purchases and rates are expected to continue to rise, a report by Bloomberg said. The index has now fallen 19% since its peak in May.
Homebuilders were up 84% last year, more than six times the S&P 500, the report noted, referring to investors that went ahead of themselves to expect a full-housing recovery.
The report added that mortgage origination arms, which comprise about 28% of profit for homebuilders, are likely to suffer as the result of rising rates, the report added.