Home builder ETFs, real estate ETFs down on home builder’s report.
Home builder and real estate ETFs declined today after the National Association of Home Builders released it monthly report which showed gains in the group’s confidence rising to its highest level since 2008 and the onset of the housing crisis triggered by The Great Recession.
The Home Builders Housing Market Index climbed to 29 for this month, compared to a reading of 25 in January and beating analysts’ expectations.
However, although home builders are feeling better, they’re still not feeling good as today’s reading is far below the index’s reading of 50 which is indicative of a healthy market.
Home builder and real estate exchange traded funds affected by today’s news:
SPDR S&P Homebuilders ETF (NYSEARCA:XHB)
Vanguard REIT ETF: (NYSEARcA:VNQ)
iShares Real Estate Trust (NYSEARCA:IYR)
Materials Select Sector SPDR Fund (NYSEARCA:XLB)
The home building market is improving but still obviously has a long way to go to full recovery as declining prices and ongoing foreclosures dampen building activity. Record low interest rates are helping, however, high unemployment takes many buyers out of the market as fewer people can qualify for mortgages.
The Home Builder Index tracks current sales, sales expectations and buyer traffic and all of these were up in today’s report.
Bottom line: The housing sector led us into the Great Recession and many analysts think it will have to lead us out as it is a major component of U.S. economic growth and employment. Today’s report is encouraging, however, points out that the home builder sector and the U.S. economy has a long way to go to reach a normally healthy state.
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Tags: etf's, Exchange-Traded Funds, home builder etfs, IYR, NYSEARCA:IYR, NYSEARCA:VNQ, NYSEARCA:XHB, NYSEARCA:XLB, VNQ, XHB, XLB
