U.S. homebuilders, real estate stocks rise after Fed rate cut

Shares of U.S. homebuilders rose after the Federal Reserve cut interest rates by a quarter of a percentage point at its policy meeting

Falling bond yields may result in lower mortgage rates, which can boost housing affordability and support demand for new homes, benefiting homebuilders

Among homebuilders, Lennar LEN.N rises 2% and D.R. Horton DHI.N up 1.4%

Peer Pultegroup PHM.N up 1.8%, KB Home KBH.N adds 2.5%, Toll Brothers TOL.N gains 1.3% and NVR Inc NVR.N rises 1.6%

The rate cuts could also reduce borrowing costs for real estate investment trusts, making financing more accessible

S&P 500 Real Estate index .SPLRCR up 1.3%; biggest contributors to index's gain include Alexandria Real Estate ARE.N up 1.8%, Prologis PLD.N 1.3% and American Tower AMT.N 2%

S&P 1500 Homebuilding index .SPCOMHOME gains 3.3%, and PHLX Housing Index .HGX up 1.7% on the session