Homebuilder ETFs Getting Hit on All Sides

July 2nd at 6:00am by Tom Lydon

The real estate market and homebuilder exchange traded funds (ETFs) have seen their fair share of challenges lately. If the numbers mean anything, those challenges could be in place for awhile.

It seems like what’s happening in the housing market isn’t moving in the same direction as sentiment. Lennar (NYSE: LEN) recently received an upgrade to “outperform” from “market perform,” despite an increasingly bleak picture for real estate, says Gary Gordon for ETF Expert. Meanwhile, homebuilder ETFs have fallen to 52-week lows. [Homebuilder ETFs Get Cheap.]

The Motley Fool reports that about one-third of houses purchased in Q1 of this year were foreclosures.  That is really not good at all for anyone in the housing or real estate business. If foreclosures remain at the same pace, and unemployment stays steady, the housing market may not stand a chance to recover. [Homebuilder ETFs: Where's That Light?]

Mortgage rates are at their lowest point in more than five decades, yet pending home sales are at their lowest point on record. That doesn’t bode well.

To top it off, Paul Ausick for Investor Place reports that sales of new homes are headed down now that federal tax credits have lapsed.

For more stores about homebuilders, visit our homebuilders category.

  • SPDR S&P Homebuilders ETF (NYSEArca: XHB)

Homebuilder ETFs, Real Estate

  • iShares Dow Jones U.S. Home Construction Index Fund (NYSEArca: ITB)

Homebuilder ETFs, Real Estate

Tisha Guerrero contributed to this article.

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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