Investing.com - Homebuilders were weaker heading into the close Tuesday, following a downbeat report from DR Horton and fears rising interest rates could stifle home-buying activity at a time when higher construction costs continue to keep a lid on the supply of homes.
DR Horton (NYSE:DHI) fell more than 3% after its full-year 2018 home sales and orders forecast fell short of analysts' estimates.
D.R. Horton forecasts sales of 51,857 homes in fiscal 2018 and a 13% rise in orders to 52,740 homes, below the average analysts' estimate of 52,325 and 52,878 homes, respectively.
Rising interest rates, meanwhile, are also weighing on the sector as mortgage rates moved above the 5% threshold last week for the first time since early 2011, reining in home-buying activity.
Lennar Corporation (NYSE:LEN), which lowered its fourth-quarter new order and deliveries forecast just last week, fell 2%. Masco Corporation (NYSE:MAS) fell about 3%.
The S&P 500 homebuilding sub index was down 2% on the day and is off more than 25% this year.