By Ryan Dezember

A bad October is getting worse for building-materials firms, whose shares are tumbling Tuesday thanks to rising bond yields, disappointing quarterly results from America's most prolific homebuilder and a decline in construction job openings.

The 288,000 construction job openings at the end of September was down 40,000 from August and 134,000 fewer than a year earlier. Last month's numbers are likely skewed by hurricanes Helene and Milton, though the drop suggests a sharp decline in construction activity despite the Federal Reserve's interest rate cut last month.

Mortgage rates have been resurgent since the rate cut. Broadly strong hiring data and the prospect of a rising federal deficit have sparked a bond selloff that has pushed up yields after the Fed's rate was cut by a half percentage point.

Even with benchmark mortgage rates rising back to around 7%, borrowing costs are lower than they were a year ago.

Still, many would-be buyers are holding out for cheaper financing, D.R. Horton CEO Paul Romanowski told investors Tuesday during a call to discuss the homebuilder's fiscal fourth-quarter results. Sales and profits were less than Wall Street analysts expected and its shares tumbled, too.

"The volatility of rates, combined with general uncertainty during the election season, is causing some buyers to stay on the sidelines," he said.

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(END) Dow Jones Newswires

October 29, 2024 14:35 ET (18:35 GMT)

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