** Shares of interest-rate sensitive homebuilders and real estate firms rally on Fri as Fed chair Powell's speech hints at rate cuts

** Odds that the Fed cuts interest rates by 25 basis points at its next meeting in Sept have risen to nearly 90% vs about 75% before Powell's comments, according to the CME's FedWatch Tool, sending benchmark U.S. 10-year yield US10YT=RR down to around 4.27%

** Among homebuilders, D.R. Horton DHI.N, Lennar LEN.N and Pultegroup PHM.N all up >3%

** S&P 500 Real Estate index .SPLRCR up 1.9%; Biggest contributors to index's gain include Alexandria Real Estate ARE.N up >3%, Prologis PLD.N 3% and American Tower AMT.N 2%

** Declining yields can potentially lead to reduced mortgage rates, benefitting homebuilders by making homes more affordable, and could provide cheaper financing for REITs

** In addition, home improvement retailers Home Depot HD.N and Lowe's LOW.N both climb ~3%, and Builders FirstSource BLDR.N up nearly 5%

** S&P 1500 Homebuilding index .SPCOMHOME gaining ~4%, and PHLX Housing Index .HGX up >3% on the session

(Lance Tupper is a Reuters market analyst. The views expressed are his own)

((lance.tupper@tr.com 1-646-279-6380))