The US real estate market continues to slump! Lowe's warning triggers a sell-off, causing a collective selloff in housing construction stocks.

At-home retailer Lowe's Companies, Inc. (LOW.US) stated that interest rates and other pressures are still weighing down on home sales, causing shares of US home builders and other real estate-related companies to plunge sharply on Wednesday, with several stocks becoming the biggest percentage losers in the S&P 500 index for the day, in sharp contrast to the market's 0.8% gain. Data showed that Lowe's Companies, Inc. fell by 5.6%, Lennar Corporation (LEN.US) fell by 4.9%, PulteGroup, Inc. (PHM.US) fell by 4.7%, D.R. Horton, Inc. (DHI.US) fell by 4.0%, and building materials company Builders FirstSource (BLDR.US) fell by 6.4%. In addition, the S&P 1500 homebuilding index fell by 3.7%, hitting a three-week low; the Philadelphia housing industry index fell by 3%. Lowe's Companies, Inc. guidance for full-year sales and earnings was below market expectations. The company's CEO Marvin Ellison stated during a conference call, "Given inflation pressures and overall economic uncertainty, consumer confidence is low." Marvin Ellison added, "Persistent lock-in effects still exist, putting pressure on housing turnover and new home starts." Therefore, he mentioned that Lowe's Companies, Inc. expects "improvements in the housing and home improvement market to be gradual." Earlier, Home Depot, Inc. CFO Richard McPhail stated on Tuesday that American consumers have been in what he called a "frozen housing environment" since 2023, with no significant improvement in sight. The company's stock fell by 2.3% on Wednesday, after rising by about 2% on Tuesday. Data released on Wednesday showed that the average rate for a 30-year fixed mortgage in the US dropped by 8 basis points to 6.09%. However, as one of the most forward-looking indicators of the real estate market, mortgage loan demand declined by 4.7%. With limited supply, high interest rates, and rising construction costs, the US real estate market has been struggling, with existing home sales in January hitting the lowest level in over two years. In his State of the Union address on Tuesday evening, President Trump reiterated his plan to limit the number of homes owned by large corporations. Jack Dohrheid, CEO of Longbow Asset Management in Tulsa, Oklahoma, commented, "One would think that the President's comments on prohibiting large companies from buying homes would benefit home builders, but the decline in stock prices may reflect the 'distorted situation' of the real estate market. Rates are too high. People are trapped in their homes, prisoners of 1%, 2%, or 3% mortgage rates, and they can't move."