Homebuilder stocks surged on Wednesday and Thursday after U.S. mortgage applications for home purchases jumped for a third week despite borrowing costs that remain at multi-year highs.
The jump in stock prices occurred despite the most recent comments from Fed Chair Jerome Powell, who said that the majority of FOMC members expect more rate hikes before the end of 2023 and this hiking cycle.
"I wouldn't take, you know, moving at consecutive meetings off the table at all," noting "the committee clearly believes that there's more work to do, that there are more rate hikes that are likely to be appropriate" in 2023.
Despite his comments, the S&P Composite 1500 Homebuilding Index rose to a fresh record high on Wednesday after the mortgage applications data. The MBA index of applications for home purchases jumped 2.8% in the week to June 23.
The contract rate on a 30-year fixed mortgage edged higher to 6.75%. This set of data covers more than 75% of all retail residential mortgage applications in the U.S.
Digital real estate stocks also surged with Opendoor Technologies (OPEN:US) jumping as much as 30%. Shares rose on Thursday as well to trade about 250% higher year-to-date.
Congressman Daniel Goldman disclosed last month that he acquired some OPEN shares on April 10, when the stock closed at $1.68. Based on Thursday’s price, OPEN stock is up about 150% compared to levels where Rep. Goldman was buying.