Homebuilder sentiment index remained at a record low on discouraging news of a potential bounce back in the housing market, the worsening U.S. economy, rising unemployment and low investor confidence in stocks and exchange traded funds (ETFs).
For the second month in a row, the index registered at 9, a far cry from the 50 needed to indicate positive sentiment. In an attempt to spark the industry, homebuilders have pleaded to Congress for a 10% tax credit, maxed out at $22,000 and a temporary interest rate reduction on a 30-year mortgage, states the Associated Press.
Whether these requests will be granted is up in the air, but the industry says they’re sorely needed.
To add gravy to the pot, builders’ gauge of current sales conditions fell one point and expectations for sales over the next six months dropped two points. It seems like there is no relief in sight for the industry.
Some possible ETFs that may be influenced are:
SPDR S&P Homebuilders ETF (XHB): down 36.7% year-to-date.
iShares Dow Jones U.S. Home Construction Index (ITB): down 40.4% 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.