At times, it seemed like the housing crisis was so bad we’d never find the bottom. But an increasing number of signs are pointing to a tentative recovery in exchange traded funds (ETFs) aimed at the sector.

What are the arguments in favor of recovery?

  • Government credits and lower prices may have helped those first-time homebuyers to heal the broken housing market.
  • Burrows also notes that the bottom or low point in valuations and sales is past, however, there is still a ways for falling prices in areas such as California and Florida. When prices truly stabilize, home builders’ gross and operating margins will improve – and so too will their bottom lines.
  • Same-store sales growth in the key markets of Florida, California, Nevada and Arizona where housing has been hit hardest, in such stores that are based on home improvement.
  • SPDR S&P Homebuilders (XHB): up 28.6% year-to-date
  • iShares Dow Jones U.S. Home Construction (ITB): up 33.2% year-to-date

For more stories about homebuilders and real estate, visit our real estate and homebuilder category.

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.