Builders FirstSource, one of the hottest stocks of the past year, was hammered after reporting a 22.5% decline in first-quarter profit, a sign that high borrowing costs are beginning to slow residential construction.

Shares of the building products supplier have stood out among chip makers and tech firms atop the S&P 500 despite the highest interest rates in a generation.

They dropped 19% today, their worst day since the March 2020 Covid crash.

JELD-WEN Holding shares fared even worse after the window and door maker swung to a quarterly loss and cut its financial outlook. Its shares lost 25%.

“As we expected, a weakening multi-family market and higher mortgage rates driving affordability challenges were headwinds to start the year," said Builders FirstSource Chief Executive Dave Rush.

The firm, which has been consolidating the building-supply sector, told investors that it expects profits to decline this quarter by a percentage in the high teens as the apartment building-boom winds down.

The construction market has been surprisingly resilient during the Fed's rate hike cycle, which was launched to cool inflation by slowing the red-hot housing market and the consumption that accompanies booming property values.

Building products stocks have surged under the reasoning that if they were profitable with 7% mortgages, they would make even more when the Fed cut rates. Results from Builders FirstSource and JELD-WEN show that the construction business might finally be buckling under high borrowing costs.