Homebuilder ETFs Still Well Below 2006 Peak Despite Tripling in Price

December 27th at 9:09am by John Spence

Homebuilder ETFs have more than tripled since 2009 but they have yet to recoup even half of the losses they suffered during the housing bust.

For example, iShares DJ US Home Construction (NYSEArca: ITB) has rallied 227% from its all-time low of $6.33 a share recorded on March 6, 2009.

The builder ETF closed Wednesday’s session at $20.73, while its record high of $50.10 was set on May 5, 2006. SPDR S&P Homebuilders ETF (NYSEArca: XHB) is another ETF indexed to housing stocks.

The sector funds are lingering near multiyear highs following data this week showing national home prices have risen over 4% year-over-year through October. [Builder ETFs at Five-Year High]

“Property values will probably keep heading higher as record-low mortgage rates, a growing population and an improving economy spur demand for housing,” Bloomberg News reports. “The turnaround in real estate is buoying household confidence and wealth, one reason why consumer spending is improving even as concern mounts that lawmakers will fail to stave off looming tax increases.”

From a technical perspective, the builder ETFs are trading slightly above their 50-day moving averages. [Will Builder ETFs Maintain Momentum in 2013]

The housing ETFs are among the best sector performers in 2012 with ITB posting a year-to-date gain of 75.5%.

iShares DJ US Home Construction

homebuilder-etf

The opinions and forecasts expressed herein are solely those of John Spence, 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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