ETF Trends
ETF Trends

Home ownership is at its lowest level in more than a decade. That could be good news for homebuilders and exchange traded funds (ETFs) as the recovery quickens as Americans look to re-enter the real estate market.

The number of Americans who own their home is at 67.3%, the lowest point in more than 10 years. The sector at large has shown signs that a stabilization or recovery may be in the works and with numbers at those lows, there’s room to grow, say Sarah Murphy and Jeff Bater for The Wall Street Journal.

  • The home-ownership rate reached a high of 69% in 2004 as low interest rates and easy credit prompted large numbers of families to stop renting and purchase homes. The rate began to fall two years later as some homeowners struggled to make their mortgage payments and eventually lost their homes to foreclosure. Between 2007 to 2009, nearly four million homes were lost to foreclosure. And home ownership rates are now moving closer to the level that was common in the 1990s.
  • One trend we’re noticing is that as Americans are buying new homes, they’re going smaller. Gone are the indistinguishable McMansions that dot sprawling new subdivisions – today, if it can be done smaller and more affordably, then homebuilders believe they will come.
  • We may not be done with foreclosures. Unemployment is still at highs not seen in more than two decades, which means that more homeowners could still walk away from their homes.
  • D.R. Horton Inc. (NYSE: DHI)  the second-largest U.S. homebuilder by revenue, reported its first quarterly profit since 2007 as sales rose and the company booked a tax benefit. [Plays  for a Brighter Homebuilding Future.]
  • Lennar (NYSE: LEN), a Miami-based homebuilder, earned $36 million for the fourth quarter ended in November. Their shares shot up 8% to their highest levels since last October. Colin Barr for Fortune reports that the real driver of Lennar’s rebound, as the company acknowledged Thursday, was a $353 million tax gain that stems from a bit of congressional largesse in November.

For more stores about homebuilders, visit our homebuilders category.

  • iShares Dow Jones U.S. Home Construction Index Fund (NYSE: ITB)

  • SPDR S&P Homebuilders (NYSEArca: XHB)

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.