Jim Cramer says to take a 'wait and see' approach to homebuilders as interest rate cuts fail to bring down mortgage rates

Core Insights - The Federal Reserve's recent rate cuts may not effectively lower mortgage rates, raising concerns for homebuilders [1] - Lennar reported disappointing quarterly earnings, with management indicating that lower mortgage rates have not yet led to increased sales [2] - KB Home's performance was slightly better, but the company also cut its full-year forecast and noted a lack of order increases despite changing mortgage rates [3] Group 1: Federal Reserve Impact - The Fed's 0.25% rate cut did not lead to a decline in longer-term yields, including mortgage rates, which actually rose [1] - There is skepticism about whether the Fed's actions will positively impact the housing market, as seen in previous instances where rate cuts did not yield expected results [1] Group 2: Company Performance - Lennar's quarterly earnings were soft, with management lowering earnings estimates and indicating that sales incentives negatively impacted margins [2] - KB Home's report showed some key metrics better than expected, but the company significantly reduced its full-year forecast [3] - Both companies expressed optimism about future rate reductions and improved business conditions, but current sales volumes have not increased meaningfully due to mortgage rates [4]