Century Communities Inc. (CCS) shares plummeted 6.72% on Monday, following a downgrade by a prominent analyst citing concerns over a changing macro environment that could negatively impact the homebuilder's future performance.

The analyst, who previously had a "Buy" rating on CCS, lowered the recommendation to "Hold" due to several factors: - Declining inflation and expected interest rate cuts by the Federal Reserve are reversing the previous tailwinds that supported strong demand for CCS's affordable homes. - Rising supply of existing homes and lower mortgage rates could reduce buyers' preference for new homes offered by CCS, potentially leading to a decline in demand. - The analyst anticipates margin pressure as CCS may need to offer more incentives to attract buyers in a weaker demand environment.

While CCS reported strong earnings for the third quarter of 2024, with revenue growth of 28% year-over-year, the analyst believes the macro conditions have flipped negative for the company. According to the report, the favorable macro environment that previously benefited CCS, such as high interest rates and low existing home inventory, is now reversing.