Rising interest rates are cooling off the U.S. housing market. The average interest rate on a 30-year mortgage, the most popular U.S. home loan, has risen to 6% for the first time since the 2008 financial crisis.

Consequently, mortgage loan applications in the U.S. are down 64% from this time last year. Higher interest rates are impacting the entire housing sector, with new home sales falling to a six-year low in July. Home resales are sitting at a two-year low. New residential construction across the U.S. fell 9.6% in July from June, according to the latest data from the U.S. Department of Housing and Urban Development.

Most industry analysts forecast more pain ahead as the Federal Reserve is widely expected to continue lifting interest rates throughout the remainder of this year and into 2023 to dampen inflation. As the entire real estate market heads south, here are three housing stocks to sell now.

Rocket Companies (RKT)

Even before the current market downturn, Detroit-based Rocket Companies (NYSE:RKT) wasn’t a good investment. Since going public in August 2020, the mortgage lender’s stock has declined 70%, including a 49% pullback this year.

As the largest online mortgage lender in the U.S., the company and its finances are particularly vulnerable to any slowdown in the housing market. Its share price has fallen sharply each time the Fed has raised interest rates this year.

In the second quarter, Rocket’s profit fell to $60 million from $1 billion last year in a clear sign of just how quickly the housing market is slowing. Its mortgage loan origination volume declined 58% in Q2 to $34.5 billion from $83.7 billion last year. To cope with the sharp downturn in its business, Rocket Companies has announced $150 million in cost cuts and offered voluntary buyout packages to more than 10% of its 26,000 employees.

D.R. Horton (DHI)

Arlington, Texas-based D.R. Horton (NYSE:DHI) has the distinction of being the largest home builder in the U.S., building an average of 45,000 new homes a year across 29 states.

If any company is likely to be impacted by a slowdown in the residential housing market, it is D.R. Horton. Already this year, DHI stock is down 34%, outpacing the decline of the S&P 500. And more declines in the stock can be expected as the housing market slows further heading into winter.

D.R. Horton forecast a slowdown in its most recent fiscal third-quarter earnings, saying it now expects full-year revenues of $33.8 billion to $34.6 billion, which is lower than its previous guidance of $35.3 billion to $36.1 billion. The company also reported a third-quarter cancellation rate of 24% compared with 17% a year earlier. With a growing number of analysts forecasting a housing recession, D.R. Horton could be forced to further revise down its earnings forecast.

In response, the company has been slowing its number of housing starts.

Redfin (RDFN)

Shares of real estate brokerage Redfin (NASDAQ:RDFN) have been a house of pain this year.

Since January, RDFN stock has cratered 80%. The company’s financials and share price have been hurt in recent months as home sellers that pay it a commission drop their asking price.

Redfin recently reported that more than half of home sellers in major markets across America, including Tampa, Phoenix and San Diego dropped the price on their house to ensure that they eventually sold. As a result, the company reported a net loss of $78.1 million in this year’s second quarter, which was 180% greater than the net loss of $27.9 million it reported in Q2 2021.

Looking ahead to the current third quarter, Redfin forecast a net loss between $79 million and $87 million, compared to a net loss of $19 million in the third quarter of 2021.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.