The current slump in residential construction is hitting homebuilding exchange traded funds. The housing and homebuilding markets have helped drive the national economy during the past few years and this is the first slowdown in forty years. Homebuilder Toll Brothers (TOL) says oversupply of inventory and a decline in confidence is the reason. The market is concerned with the direction of home prices and if it has reached the bottom.
PowerShares Dynamic Building & Construction (PKB) was down 3% yesterday and is down 12% year-to-date. Newer ETFs, SPDR Homebuilders (XHB) and iShares Dow Jones U.S. Home Construction (ITB) were both down 4% yesterday.
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.