Homebuilding and real estate exchange traded funds (ETFs) were up by as much as 2.5% or more in midday trading, despite a dismal report saying that new home sales were perched at their lowest level in more than 16 years.
Sales in March dropped by 8.5%, and it’s the slowest pace now since October 1991. The median price of a new home in March also fell 14.6%, the largest amount in almost 40 years, reports Martin Crutsinger for the Associated Press.
Other economic news was mixed:
- Factory orders for big ticket items fell for a third consecutive month in March, making for the longest streak of declines since 2001.
- Demand for durable goods fell by 0.3%, which was worse than expected.
- Consumer sentiment is at recessionary lows as the price of gasoline soars.
- On the upside, the Labor Department reported that jobless claims fell by 33,000 last week. Economists had been expecting a rise of 3,000.
So far in trading today, real estate and homebuilder ETFs seem to be shaking off the bad news:
- iShares Dow Jones US Real Estate (IYR), up 4.9% year-to-date
- SPDR S&P Homebuilders (XHB), up 13.4% year-to-date
- iShares Dow Jones US Home Construction (ITB), up 12% 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.