Homebuilder stocks surged to record highs on Friday, driven by a positive inflation report that cemented expectations for interest rate cuts in September. The Personal Consumption Expenditure (PCE) price index — commonly referred to as the Fed’s favorite inflation measure — fell from 2.6% year-on-year to 2.5% in June 2024, matching expectations. The iShares U.S. Home Construction ETF (NYSE:ITB), a key basket tracking U.S. homebuilder equity performances, jumped 3.8%, marking its third consecutive week of gains. Chart: U.S. Home Construction ETF Reaches Record Highs Image: Benzinga Pro Over the past three weeks, U.S. homebuilder stocks have surged by more than 20%, spurred by the anticipation of lower interest rates benefiting rate-sensitive sectors like home construction. Market participants are now fully pricing in a Federal Reserve rate cut in September, with expectations for at least one more reduction by December 2024. “Homebuilders are trading at the high-end of the historical valuation range, which ...