Homebuilder stock slump over rates seen overdone

By ALEX VEIGA
AP Business Writer

LOS ANGELES (AP) — 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. One prominent exchange traded fund for homebuilders has fallen about 26% this year, while the S&P 500 is down just 5%. The average rate on a 30-year mortgage hit 4.67% this week. It was 3.18% a year ago. The spike in rates appears to be taking a bite out of new home sales. Still, some Wall Street analysts say market trends continue to favor homebuilders as the spring home buying season kicks off, and the pullback could make builder stocks attractive.