One of the worst performing sectors for exchange traded funds (ETFs) this year has been the homebuilders. The Department of Commerce reports construction permits fell 8.9% to a ten-year low. This drop is also the most drastic in 17 years. Housing starts did show an unexpected increase of 2.5%; over the past year permits have dropped a total of 28%. Seeking Alpha states housing weakness is the biggest threat to the Federal Reserve’s economic growth forecasts.
- iShares Dow Jones U.S. Home Construction (ITB) -16.2% year-to-date
- streetTRACKS SPDR Homebuilders (XHB) -8.5% year-to-date
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.