Tough Row to Hoe for Real Estate Market, ETFs

November 25th at 12:00pm by Tom Lydon

Real Estate ETFsThe real estate market in the United States is in a shambles, and related exchange traded funds (ETFs) are heading in the same direction as home prices: down.

The S&P Case-Shiller Home Price national index recorded a 16.6% decline in the third quarter compared with the same period a year ago. The elements are in place for home prices to push further down, as jobless rates soar, foreclosures increase and the overall economic picture remains gloomy, reports Les Christie for CNN Money.

Today’s report indicates that the economy is spiraling backward as lenders cut back credit, causing spending to fall, and in turn, companies to cut payroll and investments. Home prices declined 1.8% month-to-month in September, the biggest one-month drop since March, reports Timothy Homan and Shobhana Chandra for Bloomberg.

For the time being, only 1.9% out of 5,000 households actually plan to buy a home right now, or in the next six months, according to a Conference Board study. Michael M. Grynbaum for The New York Times reports that the two new Federal government programs announced Tuesday should help the housing market, and ultimately aid the financial market recovery.

  • SPDR Dow Jones Wilshire (RWR), down 50.3% year-to-date

Real Estate ETF

  • iShares Dow Jones US Real Estate (IYR), down 50.6% year-to-date

Real Estate ETFs

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

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IYR RWR