During market slump, housing stocks rise as investors see potential for lower mortgage rates

Markets Associated Press

Homebuilders were one of the few bright spots during a huge stock sell-off Wednesday with hopes rising that a rush by investors into the bond market would drive mortgage rates lower.

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Yields on U.S. government bonds plunged below 2 percent Wednesday, the first time that has happened since June 2013 as new economic data points increasingly toward a global economic slowdown.

The Dow Jones industrial average dropped 440 points as investors fled to the safety of bonds, which are a safe haven for cash during market sell-offs.

The meager yields in bonds can drive mortgage rates lower. Rising mortgage rates have been one of the reasons that so many people have been priced out of the housing market this year.

On Wednesday, as the Standard & Poor's 500 fell 2.2 percent, the housing sector moved mostly in the opposite direction.

Shares of Lennar Corp. edged up 25 cents to $38.58.

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PulteGroup Inc. advanced 7 cents to $17.06.

KB Home gained 8 cents to $14.15.

DR Horton Inc. picked up 15 cents to $20.18.

Beazer Homes USA Inc. rose 8 cents to $16.42.

Shares of Hovnanian Enterprises Inc. and Toll Brothers Inc. missed out on the gains, as Hovnanian stock was unchanged at $3.28 and Toll Brothers shares slipped 19 cents to $29.79.