HD - Why Real Estate Stocks Got Rocked Today
Many housing-related stocks plunged on Monday as investors grew more fearful that COVID-19 -- the disease caused by the novel coronavirus -- and its related economic fallout would result in a sharp decline in home sales.
Shares of Zillow (NASDAQ: Z) (NASDAQ: ZG), Redfin (NASDAQ: RDFN), Meritage Homes (NYSE: MTH), PulteGroup (NYSE: PHM), Lennar (NYSE: LEN), and Home Depot (NYSE: HD) all fell approximately 20% or more.
Despite massive stimulus measures by the Federal Reserve, it's looking increasingly likely that the U.S. economy will fall into a recession in the coming months. As the number of confirmed cases of COVID-19 surge, the federal government has enacted travel bans, while state and local governments have ordered many businesses to close. Many people will see their income reduced as a result, and some will even lose their jobs. Financial markets have plunged in response, further reducing many Americans' wealth.