PulteGroup stock leads S&P 500 losers amid beatdown of homebuilder sector as Treasury yields climb

Shares of PulteGroup Inc.
PHM,
-5.45%
took a 5.7% dive in afternoon trading Tuesday, enough to pace the S&P 500’s
SPX,
-0.22%
decliners, amid concerns that new home purchases will be hurt as Treasury yields rise. The homebuilder’s stock was headed for its biggest one-day selloff since it tumbled 6.2% on Oct. 19, 2022. Of the S&P 500’s 10 biggest decliners, four were homebuilders. Besides PulteGroup, shares of D.R. Horton Inc.
DHI,
-4.78%
slid 5.0%, of Lennar Corp.
LEN,
-4.53%
shed 4.9% and of NVR Inc.
NVR,
-4.52%
dropped 4.7%. The yield on the 10-year Treasury yield
TMUBMUSD10Y,
4.266%,
which helps determine consumer borrowing rates, including home mortgages, rose 0.087 percentage points to 4.260% amid worries that inflation would remain stubbornly high. “Rising mortgage rates coupled with swelling home prices in the U.S. have forced many prospective homeowners to remain on the sidelines due to affordability issues,” said Jason Pride, vice president of investment strategy at Glenmede. “Generally, climbing interest rates curb demand and cause housing prices to fall.” The iShares U.S. Home Construction ETF
ITB,
-4.46%
declined 4.6%, with all 48 of its equity components losing ground.