The benchmark 30-year fixed mortgage rate just broke below the 6% threshold. That could break the housing market logjam – putting one of my favorite “Sleeper Sectors” for 2026 firmly in focus!
Take a look at the MoneyShow Chart of the Day. It shows the average 30-year home loan rate from Freddie Mac, which has been tracking the data since 1971. You can see it dipped to 5.98% this week, the first time that’s happened since September 2022.
Source: Freddie Mac
Why does that matter? The housing market has been caught in a state of stasis. Owners who locked in ultra-low rates in the 2s, 3s, or 4s have been reluctant to give up those cheap loans by selling. Buyers have been reluctant to buy because rates in the 6s and 7s have made monthly payments too high. As a result, home listings, sales, and pricing have remained weak for a few years.
But as I noted several weeks ago, lower rates could break the logjam! Taking out a big, round number will also get the attention of buyers AND sellers – especially since it’s being widely reported in the press.
The two housing ETFs I wrote about last month are trouncing the State Street SPDR S&P 500 ETF Trust (SPY) so far in 2026. The State Street SPDR S&P Homebuilders ETF (XHB) is up 10.8% year-to-date, while the iShares US Home Construction ETF (ITB) is up 10.5%. That compares to just 1.6% for SPY.
If mortgage rates continue on their current trajectory, that outperformance could be just the beginning. And in a year where rotation is the name of the game, home building, real estate, and construction stocks could be just what your portfolio needs to pile up more profits!
