Yahoo Finance Is the Worst Over for Homebuilder Stocks & ETFs?
(0:30) - Is The Housing Market Set To Repeat 2008?
(4:15) - What Is The Current Outlook For The Spring Housing Market?
(9:30) - What Home Builder Is Setup For The Biggest Growth?
(16:40) - Is Commercial Real Estate In Big Trouble?
(21:20) - Is Now A Good Time To Start Investing In The Real Estate Market?
(23:50) - Episode Roundup: ITB & XHB
Podcast@Zacks.com
In this episode of ETF Spotlight, I speak with Tracey Ryniec, Zacks Senior Equity Strategist, about the housing market.
Homebuilder stocks suffered last year as the Federal Reserve raised rates aggressively. The housing market, which had plunged from its pandemic-driven highs, is showing signs of stabilization lately.
Homebuilder sentiment has improved for three consecutive months. New home sales rose in March to the highest level in a year. Per CNBC, almost half of the homes on the market are selling within two weeks.
Spring is usually the most important season for the housing market. Mortgage rates are now off their recent peak but remain quite high. While affordability remains a problem, cancellations are down.
Several large homebuilders reported results in the past few weeks, and earnings were generally better than expected. The iShares U.S. Home Construction ETF ITB and the SPDR S&P Homebuilders ETF XHB have rebounded nicely and are up about 23% and 16% respectively year-to-date.
ITB tracks a market cap weighted index of home construction and related stocks. It is top heavy with four holdings--D.R. Horton DHI, Lennar LEN, NVR NVR and PulteGroup PHM--accounting for about 45% of the portfolio.
XHB is an equal-weighted ETF that has significant exposure to building-products and home-furnishing companies as well in addition to homebuilders.
Tracey likes Toll Brothers TOL, the luxury homebuilder, and M.D.C. Holdings MDC, which pays the biggest dividend at 4.9% but is not very well known. However, she reminds us that homebuilder stocks always rise on the "hope" trade into the summer, and then weaken. Investors should wait for a pullback.
Tune in to the podcast to learn more.
Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.
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PulteGroup, Inc. (PHM) : Free Stock Analysis Report
Toll Brothers Inc. (TOL) : Free Stock Analysis Report
Lennar Corporation (LEN) : Free Stock Analysis Report
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
NVR, Inc. (NVR) : Free Stock Analysis Report
M.D.C. Holdings, Inc. (MDC) : Free Stock Analysis Report
SPDR S&P Homebuilders ETF (XHB): ETF Research Reports
iShares U.S. Home Construction ETF (ITB): ETF Research Reports
