Key Highlights

  • The 10-year Treasury Yield hit its highest level since 2007, and the 30-year its highest since 2004.
  • The S&P Homebuilding index is down for the year, and Home Depot and Lowe's are both lower in 2026.
  • Tuesday brings the Case-Shiller home price index along with consumer confidence and JOLTS job openings.
  • Home-improvement retailers depend on housing activity, so higher Mortgage rates also weigh on their shares.

With the 10-year Treasury yield at its highest level since 2007 and mortgage rates climbing, housing-linked stocks remain under pressure, and Monday, September 28 did nothing to ease it.

The rate problem in one chart

Housing is one of the most rate-sensitive parts of the economy, and the Bond Market sent it a harsh message on Monday, September 28. The 10-year Treasury yield hit its highest level since 2007, and the 30-year its highest since 2004. Mortgage rates tend to follow the 10-year closely.

That link is already visible. According to Schwab (NYSE:SCHW), the average 30-year mortgage rate has crossed back above a closely watched threshold for the first time since January 2025. For homebuyers, every step higher in mortgage rates means a bigger monthly payment on the same house, which can push people out of the market or delay purchases.

The damage to housing stocks

The pressure shows up in year-to-date performance. The S&P Homebuilding index is down for the year, and Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) are both lower in 2026.

On Monday, Home Depot slipped again, per stockmarketwatch, with no company-specific news. It was one of many Dow members in the red as the Blue-Chip index fell 347.11 points to 51,481.51. The S&P 500 lost 59.72 points to 7,683.69.

Why home improvement suffers too

Home-improvement retailers depend on housing activity. When people buy homes, they renovate, repaint and furnish them. When mortgage rates rise and sales slow, those projects shrink. Higher rates also make it more expensive for homeowners to borrow against their houses to pay for big remodels.

Commercial real estate is feeling a chill as well. CoStar Group (NASDAQ:CSGP) fell after its own data showed third-quarter Demand for commercial space was "slightly negative, with net absorption expected to give back 2.7 million square feet."

The Fed is not riding to the rescue

The Federal Reserve raised rates at its September meeting, its first hike in three years, and futures now price a majority chance of another hike in October. Fed Chair Kevin Warsh has said, "Inflation is too high and has been for too long." Governor Lisa Cook said on Monday she expects continued Inflation pressure from the AI build-out and higher oil prices.

Oil is a big part of the story. President Trump rejected Iran's plan to reopen the Strait of Hormuz over the weekend, and crude rose. Allianz's Mohamed El-Erian argued that the yield problem goes deeper: "We would be having this yield discussion, even if oil prices were lower.we have an imbalance in longer-term demand for bonds and longer-term supply."

Not every property-linked stock fell. Brixmor Property Group (NYSE:BRX), which owns grocery-anchored shopping centers, jumped after agreeing with Everview Partners to buy Slate Grocery REIT for $2.34 billion, a reminder that real-estate dealmaking continues even as rates bite.

Housing data and consumer confidence test the rate squeeze

Tuesday brings the Case-Shiller home price index along with consumer confidence and JOLTS job openings. Thursday's construction spending report will show how building activity is holding up, and the ISM Manufacturing survey lands the same day.

The biggest swing factors are Wednesday's PCE inflation data and Friday's September jobs report. "If Treasury yields pull back (or at least stop moving higher), this could help provide a lift to stocks," Schwab's Nathan Peterson said. For homebuilders and home-improvement retailers, a pullback in yields would be especially welcome, since it could pull mortgage rates down with it. Until then, the rate squeeze remains the dominant force.