Home building stocks were way down last year but exchange traded funds (ETFs) with this focus have been building themselves up. iShares Dow Jones U.S. Home Construction Index Fund (ITB) ended 2006 down 15% and SPDR S&P Homebuilders (XHB) was down 17% – but the worst may be over. Trang Ho of Investor’s Business Daily reports inventories in December were improved to 5.9 months supply, from July’s peak of 7.2 months of inventory.
ITB holds 23 companies which build condos, single-family homes and mobile homes, such as Centex (CTX). XHB holds similar companies, but it also includes home improvement companies such as Home Depot (HD).
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.