NEW YORK, Feb 25 (Reuters) - Shares of U.S. homebuilders and other housing-related companies slumped on Wednesday as home improvement retailer Lowe's said interest rates and other pressures were still weighing on home sales.

Several of the stocks ​were among the day's biggest percentage decliners in the ‌S&P 500, bucking the broader market's 0.8% increase. Lowe's, which sports a market value of nearly $150 billion, lost 5.6%.

The ⁠U.S. housing market has been struggling due to limited supply, high interest rates and ⁠rising construction costs. Sales of existing homes fell to their lowest ‌level in more than ‌two years in January. 

Shares of Lennar ( LEN ) finished 4.9% lower, PulteGroup ( PHM ) dropped 4.5% and D.R. Horton ( DHI ) lost 4%. The ​S&P 1500 Homebuilding index lost 3.7%, hitting a ‌three-week low, while the PHLX housing sector index was down 3%.

Building materials company Builders FirstSource ( BLDR ) tumbled 6.4%.

President Donald Trump, in his State of the ​Union address late Tuesday reiterated plans to ​limit the ‌number of homes major corporations can own. 

"You would think given the president's remarks on outlawing big corporations from buying homes that that would be a boon to ⁠the homebuilders," said Jake Dollarhide, chief executive officer of Longbow Asset Management in ⁠Tulsa, Oklahoma.

But, Dollarhide said, the stocks' declines may reflect "the warped situation" the housing market is in. "Interest rates are too high. People are stuck in their homes, a prisoner to their one-, two- or three-percent mortgage rates, and they're not moving," he said.

LOCK-IN EFFECT

Lowe's forecast ⁠full-year sales ‌and earnings below Wall Street estimates, and the company's chief executive ‌said during a conference call that consumer confidence is "subdued given inflationary pressures and overall ⁠economic uncertainty."

CEO Marvin Ellison said "a persistent lock-in effect remains in place, keeping housing turnover and new home starts under pressure." As such, he said Lowe's expects "improvement in housing and home improvement markets to be gradual." 

On Tuesday, Home Depot CFO Richard McPhail said U.S. consumers have been operating in what he described as a "frozen housing environment" since 2023, with conditions yet to show meaningful improvement. The ​company's shares fell 2.3% on Wednesday after rising about 2% on Tuesday.

The average 30-year fixed mortgage shed 8 basis points to 6.09%, according to data released on Wednesday. Even so, ​demand for loans to purchase homes, among ‌the housing market's most forward-looking indicators, fell by 4.7%.