Housing-Linked Stocks Sink as High Mortgage Rates Freeze America’s Homebuying Market

Several major U.S. housing-related stocks are under heavy pressure, even as the broader stock market continues to climb. According to 24/7 Wall St., companies tied to homebuilding, appliances, pools, real estate listings, and home improvement are being hurt by weak housing turnover, high mortgage rates, and cautious consumers.

Housing Stocks Are Struggling While the S&P 500 Rises

The key problem is not simply falling home prices. Instead, the deeper issue is that fewer Americans are buying and selling homes. When people stop moving, many housing-related businesses lose demand. Homebuilders sell fewer new homes, appliance companies sell fewer products, pool companies see weaker installation demand, and online real estate platforms get fewer listing visits.

This has created a sharp split in the market. The S&P 500 and SPY have been rising, while several housing-linked stocks remain far below their previous highs. Whirlpool, Lennar, Pool Corporation, Zillow, and Home Depot are all feeling the effects of a frozen housing market in different ways.

Whirlpool Becomes a Clear Sign of Housing Weakness

Whirlpool has become one of the clearest examples of the downturn. The appliance maker has reportedly fallen 81% over five years. Its recent results showed a 9.6% revenue decline, while North America EBIT dropped sharply to just $6 million. The company also suspended its dividend as it focuses on reducing more than $900 million in debt.

Why it matters: Whirlpool depends heavily on home activity. When people move, remodel, or buy new homes, they often purchase refrigerators, washers, dryers, ovens, and other appliances. But when housing transactions slow down, demand for big-ticket home products also weakens.

Lennar Faces Pressure From Affordability Problems

Lennar, one of America’s largest homebuilders, has also taken a major hit. The company’s stock reportedly dropped from around $185 in summer 2024 to about $85. Its first-quarter revenue fell 13% year over year to $6.62 billion, while gross margin on home sales declined from 18.7% to 15.2%.

The pressure on Lennar shows how difficult the housing market has become. Mortgage rates remain high, home prices are still expensive in many areas, and buyers are more careful about making large financial decisions. Even if people want to buy homes, many cannot afford the monthly payments.

Pool Corporation Shows the Difference Between Maintenance and New Spending

Pool Corporation has also struggled, with its stock reportedly down 55%. However, the company still performed better than expected in its latest quarter, with earnings per share of $1.45 compared with expectations of $1.35.

This shows an important difference in consumer behavior. Existing pool owners still need maintenance, repairs, and chemicals. But new pool installations are weaker because they often happen when people move into a new house or spend heavily on upgrades. With fewer home transactions, discretionary projects are delayed.

Zillow’s Growth Is Not Enough to Escape the Housing Freeze

Zillow has tried to shift its business toward rentals and multifamily housing. Its rentals revenue grew 42% to $183 million, while multifamily revenue jumped 57%. Even so, Zillow’s stock reportedly fell from $90 to $39 because its core business still depends on people searching, moving, and buying homes.

The lesson is simple: strong growth in one area may not fully protect a company when the larger housing market is slow. Real estate platforms need active buyers, sellers, renters, agents, and advertisers to keep growth healthy.

Home Depot Holds Up Better but Still Feels the Pressure

Home Depot has been more resilient than some other housing-related companies, falling only about 15% over the past year, according to the report. However, the company is still facing weaker home improvement demand because consumers remain uncertain and housing activity is under pressure.

Home Depot benefits from repair and maintenance spending, which tends to continue even during slow housing periods. Still, large renovation projects often get delayed when homeowners feel less confident or when borrowing costs are high.

Why High Mortgage Rates Matter So Much

High mortgage rates are one of the biggest reasons the housing market is stuck. Many homeowners locked in lower mortgage rates in previous years. Selling a home today could mean giving up a low-rate mortgage and replacing it with a much more expensive loan.

That makes many homeowners stay where they are. At the same time, new buyers face higher monthly payments. This creates a “frozen” market, where sellers do not want to sell and buyers struggle to afford purchases.

Is This a Buying Opportunity or a Value Trap?

For investors, the big question is whether these beaten-down housing stocks are cheap opportunities or value traps. If mortgage rates fall and home sales recover, companies like Lennar, Whirlpool, Zillow, Pool Corporation, and Home Depot could benefit. But if housing transactions remain weak through 2026 or 2027, these stocks may continue to struggle.

Investors should watch mortgage rates, the 10-year Treasury yield, home sales data, and consumer confidence. These signals may show whether the housing market is starting to thaw or staying frozen.

Conclusion

The current housing-stock downturn shows that the stock market and the real economy do not always move together. While the S&P 500 reaches new highs, many housing-linked companies are still facing deep challenges. The main issue is not just price—it is volume. Until more Americans start buying, selling, moving, and renovating, housing-related stocks may remain under pressure.

In short: Whirlpool, Lennar, Pool Corporation, Zillow, and Home Depot are all telling the same story. The housing market needs movement. Without it, even strong companies can look weak.

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