At first glance, circumstances may not appear particularly auspicious for the benchmark Dow Jones U.S. Select Home Construction Index. After starting the first quarter of 2024 on a strong note, the index saw its positive momentum trimmed as consistently hot jobs reports slammed the brakes on the Federal Reserve implementing interest rate cuts.

From a monetary policy perspective, the most recent May employment readout represented a case of good news being bad news. On the positive front, U.S. employers added 272,000 nonfarm payrolls last month, far more than the 180,000 that economists had anticipated. However, on the less-encouraging side of...