Housing Starts Jump (ITB, XHB, IYR, KBE)

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November Housing Starts Jump, Carry Builders, Real Estate Sector Higher

November housing starts jumped in November by 9% to 685,000 from last month’s 628,000, the best reading in nearly twenty months (April, 2010) but still far below the 1.5 million considered “normal.”

However, the homebuilding sector cheered the news with iShares Dow Jones Home Construction ETF (NYSEARCA:ITB) jumping 5.5% in early dealings and SPDR S&P Homebuilders ETF (NYSEARCA:XHB) advancing 4.8%.

The Real Estate Sector was sharply higher, as well, with iShares Real Estate exchange traded fund (NYSEARCA:IYR) gaining +2.8% at mid-day and StreetTracks Dow Jones Wilshire REIT (NYSEARCA:RWR) adding 2.5%.

Internals of the report showed strongest gains in the multi-family sector with declines in single family housing as foreclosures, jobs and incomes create more renters and fewer homeowners.  Tight credit conditions in the Banking Sector (NYSEARCA:KBE) were also cited as a driving force to fewer home purchases but the regional banking sector followed higher with gains of 3%.

Bottom line: The nation’s economy continues to gain traction, particularly noted this week in the very important housing sector.  The news is better but not good by historical standards.

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