9 Stocks to Watch as Mortgage Rates Plummet

Mortgage rates have dropped to their lowest level in nearly a year, boosting the housing market and potentially benefiting home loan servicers, builders, and retailers. Servicers like Rocket Companies, Mr. Cooper Group, and LendingTree could see increased fee income and earnings, while homebuilders like Lennar Corp. and PulteGroup may benefit from higher demand for new builds. Retailers like Home Depot, Lowe's, RH, and Wayfair could also see a surge in sales as homeowners invest in renovations and updates.

Mortgage rates have fallen to their lowest level in nearly a year, providing a significant boost to the housing market. The average 30-year fixed mortgage rate dropped to 6.35%, the lowest since October 2024, according to Freddie Mac Mortgage Rates Are at an 11-Month Low. Will That Be Enough to Save This Housing Market?^[1]. This decline is largely attributed to widespread expectations that the Federal Reserve will cut rates next week, offering some relief to the beleaguered housing market.

The drop in mortgage rates could entice more home buyers to enter the market, especially if rates continue to decline and fall below the key psychological threshold of 6%. For instance, a home shopper with a $3,000 monthly housing budget can now afford a $466,000 home at a 6.35% mortgage rate, compared to $442,500 at a 7% rate Mortgage Rates Are at an 11-Month Low. Will That Be Enough to Save This Housing Market?^[1].

While the lower rates may stimulate demand, the market is still far from affordable. Near-record home prices and rising costs such as home insurance and property taxes are keeping many potential buyers at bay. Despite the recent drop in rates, the housing market continues to face challenges, with mortgage rates needing to go significantly lower to make a substantial impact on demand Mortgage Rates Are at an 11-Month Low. Will That Be Enough to Save This Housing Market?^[1].

The recent decline in mortgage rates is also a boon for existing homeowners who have been waiting to refinance. However, home prices that have climbed more than 50% since 2019, combined with a weakening job market, pose significant headwinds for home sales Mortgage Rates Are at an 11-Month Low. Will That Be Enough to Save This Housing Market?^[1].

In addition to the housing market, servicers like Rocket Companies, Mr. Cooper Group, and LendingTree could see increased fee income and earnings due to higher refinancing activity. Homebuilders like Lennar Corp. and PulteGroup may also benefit from higher demand for new builds, with Lennar projecting earnings of $2.14 per share and revenue of $9.0085 billion for the third quarter of 2025 Lennar (LEN) to Release Earnings on Thursday^[2]. Retailers such as Home Depot, Lowe's, RH, and Wayfair could also experience a surge in sales as homeowners invest in renovations and updates.

In conclusion, the drop in mortgage rates is a positive development for the housing market and related sectors. However, the market still faces significant challenges, and the extent to which lower rates will stimulate demand remains to be seen.