Homebuilding and real estate exchange traded funds (ETFs) reeled from the news that pending home sales hit a new low in March.
It was the second consecutive months in which a new low was hit, reports David Goldman for CNN Money. The reading was down 20.1% from March 2007, and 35% from the index’s high in April 2005.
The Pending Home Sales Index is seen as a more forward-looking indicator of home sales than other real estate forecasts because they’re measured a month or two before a sale actually closes.
For existing home sales, the numbers were slightly better: instead of the predicted 14.5% decline, the projections are now for a 14.4% decline. It’s a case of taking the good news where you can get it. The actual figures will be released on May 23.
Among the related ETFs affected by the news:
- SPDR S&P Homebuilders (XHB): up 18.6% year-to-date
- iShares Dow Jones US Home Construction (ITB): up 18.9% year-to-date
- iShares FTSE NAREITH Real Estate 50 (FTY): up 9.7% year-to-date
- DJ Wilshire REIT (RWR): up 11.4% 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.