Actions of Wayfair (NYSE:W) they moved lower last month as the online home furnishings retailer was hit by rising interest rates and a weak earnings report in early November.

Wayfair has struggled since its pandemic-era boom as Americans cut back on home spending due to interest rates and the lock-in effect of low mortgage rates during the pandemic, which has pushed existing home sales to their lowest point in nearly 30 years.

Against this backdrop, Wayfair fell another 24% last October, according to data from S&P Global Market Intelligence.

As you can see from the chart below, most of the losses in stocks occurred in the second half of the month. You can also see gains in the 10-year Treasury yield over the month, which pressured Wayfair shares.

w given by YCharts.

Wayfair’s struggles continue

Investors in home improvement stocks like Wayfair have been patiently waiting for a recovery in the housing market, but after the Federal Reserve cut the benchmark federal funds rate by 50 basis points in September, investors expected rates to drop. Instead, the opposite happened, and higher mortgage rates, which are closely tied to Treasury yields, dampened hopes for a housing recovery.

Wayfair earned a buy rating from Needham, who reinstated coverage on the stock with a $60 price target, as the analyst anticipates a tailwind from the housing market recovery in 2025.

Later in the month, Piper Sandler cut its price target on Wayfair from $67 to $63 as industry controls showed a slowdown in demand in September and October as well as advertising pressure from political ads. Piper Sandler maintained its Overweight rating on the stock.

Image source: Getty Images.

Wayfair misses the earnings mark

Wayfair continued its slide in November, as shares fell 6% on its third-quarter earnings report on Nov. 1.

The company reported another round of revenue declines, which fell 2 percent to $2.88 billion, according to estimates, while adjusted earnings per share improved from $0.13 to $0.22 , which beat estimates by $0.15. It also forecast another drop in revenue in Q4.

Finally, stocks fell again on Wednesday after Trump was elected, as Treasury yields rose on the news, which investors saw as a loss for home improvement retailers like Wayfair.

If the housing market remains in a slump, Wayfair is likely to continue to struggle.

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Jeremy Bowman has no position in any of the shares mentioned. The Motley Fool recommends Wayfair. The Motley Fool has a disclosure policy.