A Walk Down Misery Lane for Homebuilders ETFs

The December reading of U.S. homebuilders’ sentiment stayed at a record low for the third consecutive month, meaning bad news for related investment vehicles, such as exchange traded funds (ETFs). The National Association of Home Builders said Monday its housing market index came in at a 19 for December. An index reading above 50 indicates positive sentiment, to give a better picture from the rating standpoint. CNN Money reports that the index gauges builders perceptions of conditions and expectations for home sales over the next six months. This is the lowest level since the index began in 1985.

Any upswing isn’t anticipated until the middle of next year. Nationwide, new home sales are expected to fall 788,000 and further into next year at 693,000. Hard-hit homebuilder ETFs:

• SPDR S&P Homebuilders (XHB) down 48.2% year-to-date
• iShares Dow Jones US Home Construction (ITB) down 58.4% year-to-date