US homebuilders rise after Democrats sweep Congress
XLRE•Homebuilder shares rose 2% to 5% before the bell after Democrats seized control of the Senate and House in the midterm elections. UBS said Democratic control could increase the chances of lower building-material tariffs, which it estimates add about $7,500 to the cost of a new home.
1. Shares rise on election news
D.R. Horton, Lennar and PulteGroup shares rose between 3% and 5% before the bell, while KB Home and NVR gained about 2%.
2. Potential policy changes
UBS said Democratic control could increase the chances of lower tariffs on building materials. It estimates tariffs add about $7,500 to the cost of a new home, and said lower tariffs could improve affordability. The brokerage also said expanded state and local tax deductions could boost disposable income and housing demand, particularly in high-tax states, while the More Homes on the Market Act and First Home Affordability Act could support housing turnover and first-time buyer affordability.
3. Housing index performance
The PHLX Housing Index was down about 4% year to date.
