Homebuilder ETFs should see action this week as investors get quarterly earnings from two sector bellwethers and a report on August new-home sales.
The iShares U.S. Home Construction ETF (NYSEArca: ITB) and SPDR S&P Homebuilders ETF (NYSEArca: XHB) were both down Monday for the third straight session after last Wednesday’s big Fed-fueled rally. [Homebuilder ETFs May Have More Upside After Fed Puts Off Taper]
Lennar (NYSE: LEN) and KB Home (NYSE: KBH) will announce quarterly financial results on Tuesday. In particular, investors will be looking for any signs the recent rise in mortgage rates has cut into demand.
“If there could be one quarter that might define this week, it will be Lennar’s on Tuesday,” said Jim Cramer at TheStreet.com. “There are two components to this quarter. First, is this possibly the last good quarter because the mortgage lock-ins are now over? Or, second, have rates stabilized or gone lower now, meaning that buyers are coming back into the market?”
Homebuilder ETFs have been weak performers in recent months as Treasury yields jumped.