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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Homebuilder stocks suffer during swoon

LOS ANGELES – Homebuilder stocks have lagged far behind the broader market during Wall Street’s swoon this year, weighed down by fears that rising mortgage rates could severely dampen sales.

Yet some Wall Street analysts say the selling may be overdone.

One prominent exchange traded fund, the SPDR S&P Homebuilders ETF, is down about 26% this year, and many of the biggest homebuilders are down even more. Meanwhile, the benchmark S&P 500 is down just 5%.

The swift rise in mortgage rates this year has spooked investors already worried about the highest inflation in decades.

The average rate on a 30-year mortgage rose this week to 4.67%, according to mortgage buyer Freddie Mac. A year ago, it stood at 3.18%.

Economy adds 431K jobs

America’s employers extended a streak of robust hiring in March, adding 431,000 jobs in a sign of the economy’s resilience in the face of a still-destructive pandemic, Russia’s war against Ukraine and the highest inflation in 40 years.

The government’s report Friday showed that last month’s job growth helped shrink the unemployment rate to 3.6%.

That’s the lowest rate since the pandemic erupted two years ago and just above the half-century low of 3.5% that was reached two years ago.

Despite the inflation surge, persistent supply bottlenecks, damage from COVID-19 and now a war in Europe, employers have added at least 400,000 jobs for 11 months. In its report, the government also sharply revised up its estimate of hiring in January and February by a combined 95,000 jobs.

The March report sketched a bright picture of the job market, with steady hiring and rising wages in many industries. Average hourly pay has risen a strong 5.6% over the past 12 months, welcome news for employees across the economy.

Still, those pay raises aren’t keeping up with the spike in inflation that has put the Federal Reserve on track to raise rates multiple times, perhaps aggressively, in the coming months.

From wire reports