Real estate stocks slid at Wednesday's market open, weighed down by the latest disappointing data on housing starts and a spike in mortgage rates, darkening the outlook for the sector.

By 9:00 a.m. EST, theReal Estate Select Sector SPDR Fund(NYSE:XLRE) had dropped by 0.3%. This marked its fourth consecutive day of losses and set a course for its lowest close since the end of November 2023.

The fund has also slipped below its 200-day moving average, a critical long-term benchmark, signaling that investor sentiment has turned negative.

The average interest rate for 30-year fixed-rate mortgages with...