Homebuilder stocks are companies that are involved in the building of homes and condominiums for sale to the retail public. With real estate being such a large part of an economy, homebuilder stocks are an important gauge to help understand the strength of an economy. Some homebuilder stocks can get into trouble if they become over-leveraged, taking on too much debt to try and increase their revenue and earnings. Homebuilder stocks are very susceptible to shifts in interest rates and changes to the job market. When rates are lowered and more jobs are being created, this is a favorable environment for homebuilder stocks. Conversely, when interest rates are rising and jobs are being lost, this can be seen as a negative for homebuilder stocks.