Market Analysis: Mortgage Rate Decline Drives Housing Sector Gains Amid Fed Cut Expectations (2025-11-26)

On November 26, 2025 (02:00 EST), MarketWatch reported that mortgage rates fell sharply, pushing the 30-year fixed mortgage rate to its lowest level in a month. This decline was driven by growing market expectations of a Federal Reserve rate cut in December, amplified by dovish comments from Fed officials like Governor Christopher Waller [Initial Event]. Traders now price an 81% probability of a December rate cut, up from earlier levels [7].

:
Housing-related stocks significantly outperformed the broader market:

• Rocket Companies (RKT, mortgage lender): +7.61% [3]
• D.R. Horton (DHI, homebuilder): +4.6% [2]
• SPDR S&P Homebuilders ETF (XHB): +3.42% [1]

These gains exceeded broader indices: Dow Jones (+1.36%), S&P 500 (+1.03%), NASDAQ (+0.98%) [4].

:

• Consumer Cyclical (includes housing): +1.228% [0]
• Financial Services: +1.008% [0]
• Real Estate: -1.485% [0] (contrasting underperformance warrants investigation)

:
Positive sentiment for housing sector, with strong investor interest in mortgage lenders and homebuilders, driven by optimism about lower borrowing costs stimulating demand [7].

Metric	Value	Source
RKT Stock Gain	+7.61%	[3]
DHI Stock Gain	+4.6%	[2]
XHB ETF Gain	+3.42%	[1]
RKT Trading Volume	38.82M shares	[3]
Real Estate Sector Change	-1.485%	[0]

:

• RKT’s high volume indicates strong investor conviction in mortgage rate-sensitive stocks.
• The Real Estate sector’s decline despite favorable news suggests potential headwinds (e.g., oversupply, valuation concerns).

• Directly Impacted
  : Rocket Companies (RKT), D.R. Horton (DHI), SPDR S&P Homebuilders ETF (XHB)
• Related Sectors
  : Consumer Cyclical, Financial Services
• Supply Chain
  : Building materials (lumber, cement) may benefit from increased construction activity if demand rises.

:

• Exact magnitude of the 30-year mortgage rate drop.
• Reason for Real Estate sector underperformance.
• Sustainability of mortgage rate declines.

:

• Expectation Risk
  : Optimism relies on a Fed rate cut, which is not guaranteed. A no-cut decision could reverse mortgage rate gains and stock prices [7].
• Sector Contrast
  : Real Estate’s underperformance raises concerns about sector-specific issues that need further analysis [0].

:

• Fed’s December meeting outcome (rate cut decision).
• Weekly mortgage rate trends (sustainability of decline).
• Monthly home sales data (demand response to lower rates).
• Real Estate sector performance (resolution of underperformance).