New home sales were far weaker than expected in November and construction stocks are not doing well. The stocks of the biggest names like Lennar, Pulte, DR Horton and Toll Brothers fell more than 2% on the news.

According to the US Census, new home sales in November fell 11% more than expected from October.

The October reading was also revised lower. Sales reached an annual rate of 841,000 compared to 979,000 in July. These numbers are based on signed contracts, not closings. Sales increased by 20.8% compared to the previous year.

The decline could be due to prices that have steadily increased. The average price for a newly built home rose 2.2% from November 2019 to $ 335,300.

“As a sign that affordability will remain a major challenge, entry-level home sales below $ 200,000 accounted for only 2% of total sales,” said George Ratiu, senior economist at realtor.com. “These numbers reflect the slowing economy, rising jobless claims and the growing affordability challenge that have hampered activity despite record-low mortgage rates.”

Mortgage rates fell dramatically in November when these sales were signed. This gave buyers more purchasing power, but likely also contributed to prices rising for the same reason.

“I have to wonder if the aggressive home price hikes are starting to affect this first-time buyer. After all, Toll Brothers used the term ‘sticker shock’ to refer to some when they reported profits a few weeks ago,” said Peter Boockvar, chief investment officer at the Bleakley Advisory Group.