Some good news for housing, as new home sales in the U.S. grew in August to the highest level in over one year. Builders cut pricing to compete with foreclosures and previously owned homes, reports Bob Willis for Bloomberg. If the worst housing slump since the Great Depression is finally turning, there are good ways to play the upward trend.

There is a so-called “big four” when it comes to domestic real estate or REIT, ETFs to pick from is you so desire the asset class for your portfolio. Don Dion for The Street says the following four are worth your consideration due to low fees, liquidity and diversification:

• iShares Dow Jones U.S. Real Estate (NYSEAcra: IYR)

The most popular ETF,with 24 million shares traded per day. Expense ratio is 0.48%, and there are $2.9 billion assets under management. IYR tracks the Dow Jones U.S. Real Estate Index, a float-adjusted, market-cap weighted index. Top 20 holdings are timber REITs.

• iShares Cohen & Steer Realty Majors (NYSEArca: ICF)

About 1 million shares per day are traded, and the expense ratio is 0.35%. Assets under management is at $1.7 billion. ICF follows the Cohen & Steers Realty Majors Index, takes into account management, portfolio quality and sector and geographic diversification. It rebalances quarterly such that no fund exceeds 8% of assets.

• Vanguard REIT (NYSEArca: VNQ)

VNQ has about 20 more holdings than most other REIT ETFs, and the sum of their allocations only came to 2.4% as of June 30. VNQ had $3.4 billion at the end of August and costs 0.15%. About 3 million shares per day are traded. This is a great buy-and-hold fund, but this ETF is not recommended for those who want up-to-date information on asset allocation. Since the fund does not re-balance quarterly as the others do, up-to-date information on holdings is not readily available. The low fees are unbeatable from a long term investor standpoint.

• SPDR Dow Jones REIT (NYSEArca: RWR)
  

RWR has $1.3 billion in assets and has an expense ratio of 0.25%. About 0.8 million shares trade per day, and  tracks the Dow Jones U.S. Select REIT Index, a float-adjusted, market cap-weighted index that rebalances quarterly. Compares the closest to IYR as far as holdings are concerned.

For more stories about real estate, visit our real estate category.

President Bush signed a major housing bill that is meant to provide mortgage relief for 400,000 homeowners. The move could help stabilize the financial markets and improve consumer confidence, reports Jennifer Loven for the Associated Press.

The measure allows homeowners who can’t afford their payments to refinance into more affordable, government-backed loans. It also delivers a temporary lifeline to Fannie Mae and Freddie Mac, giving the Treasury unlimited power through 2009 to loan them money or buy their stock. It also tightens the reins on the two businesses.

Also included is $15 billion in tax cuts, and a $7,500 credit for first-time homebuyers for homes bought between April 9, 2008 and July 1, 2009.

Real estate and homebuilder ETFs are trading lower today:

• Vanguard REIT Index (VNQ), up 1.7% year-to-date
• iShares Cohen & Steers Realty Majors (ICF), up 1.5% year-to-date
• iShares FTSE NAREIT Residential (REZ), up 15.4% year-to-date
• SPDR S&P Homebuilders (XHB), down 8.9% year-to-date

Meanwhile, provisions for a bailout and getting the oxygen of the economy flowing again have financial ETFs trading about even, including:

• iShares Dow Jones US Financial Services (IYG), down 30.7% year-to-date
• Financial Select Sector SPDR (XLF), down 29.8% year-to-date