Homebuilder exchange traded funds(ETFs) were seeing higher numbers a month ago, but they were still riding high from tax credits that encouraged people to buy homes. Now that those credits are gone, they’re feeling the pinch and it’s not pretty.Earlier this year, homebuilder numbers were up and sales were steadily increasing. One month ago, a report from the National Association of Home Builders, showed a brief-but-encouraging surge in housing industry confidence. [Housing Starts Drag on Markets.]
Rich Smith for The Motely Fool reports that those numbers weren’t exactly enough to sustain any recovery in the sector. Federal subsidies expired on April 30 and it wasn’t long before they began to feel the pain, bringing confidence back to real levels. [Homebuilder ETFs: Out of the Woods?]
It could be some time before homebuilders begin to look appealing again, but when they cross back over those trend lines they’re sure to be bargains.
For more stories about homebuilders, visit our homebuilders category.
- SPDR KBW Mortgage Finance ETF (NYSEArca KME)
- SPDR S&P Homebuilders ETF (NYSEArca: XHB)
- iShares Dow Jones U.S. Home Construction Index Fund (NYSEArca: ITB)
Tisha Guerrero contributed to this article.
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.