The latest numbers show 2007 going down as one of the worst years for housing in decades. And, iShares Dow Jones US Home Construction (ITB) is the worst performing exchange traded fund (ETF) year-to-date. At -13.7%, do not look for a rebound anytime soon. Maya Roney for BusinessWeek reports soft home sales are likely to continue through May, a time when home sales are traditionally the highest.
Stricter lending reduced the pool of buyers and even if they kept the standards the same, there wouldn’t be a decent recovery, mostly because home prices accelerated faster then incomes during the boom. ETF investors who are looking to go bottom fishing with ITB might keep an eye on the 200 day moving average as an entry and exit point.
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.