Housing and Big Ticket Item Sales Drop, Taking ETFs With Them

February 27, 2008 at 1:00 pm by Tom Lydon      Bookmark and Share

12inchnumbers More housing and consumer numbers came in today, affected real estate and retail exchange traded funds (ETFs).

The Commerce Department reported that new home sales fell in January by 2.8%. It’s the slowest pace in 13 years. The median price of a home also dropped to $216,000, down 4.3% from December’s median price, reports the Associated Press.

The slowing sales activity coupled with mortgage foreclosures is creating an inventory backlog, leading analysts to believe that the crisis is bound to get worse before it gets better.

In this time of belt-tightening and rising prices for oil and gas, a housing slump and credit squeeze, it’s also not much of a surprise that consumers are holding off on purchasing big-ticket items. Orders dropped by 5.3% in January, the largest amount in five months, reports Martin Crutsinger for the Associated Press.

The numbers were worse than expected, and they cover a wide swath: commercial aircraft, autos, heavy machinery and computers.

Some ETFs that might feel the pinch as wallets are closed shut:

  • iShares Dow Jones Transportation Average (IYT)
  • SPDR S&P Retail (XRT)
  • Consumer Discretionary SPDR (XLY)
  • iShares Dow Jones US Real Estate (IYR)
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