MTH - Why Homebuilder Stocks Soared Today
Shares of major homebuilders have soared today after the National Association of Home Builders (NAHB) released its NAHB Housing Market Index (HMI), which showed an uptick in sentiment for May. Following a precipitous plunge in April due to the COVID-19 pandemic, homebuilder sentiment posted a better-than-expected increase.
Here's where prominent homebuilder stocks were trading as of 12:30 p.m. EDT:
The index, which can range from 0 to 100, had plummeted from 72 in March to 30 in April. That 42-point decline was the biggest drop on record. The HMI rebounded to 37 in May. Homebuilders hope that homebuying activity will bounce back, particularly given mortgage rates have fallen to record lows as the Federal Reserve has pumped cash into the economy to lower rates -- a part of its efforts to stimulate economic activity in the face of the novel coronavirus outbreak. Economists were expected an HMI of 35 in May.