As a result of the tax credits that expired on April 30, home sales plunged in July to their lowest level in 15 years. Exchange traded funds (ETFs) were socked by the disappointing news, with some falling as much as 6% in early trading.

According to the ETF Dashboard, one of the hardest-hit ETFs this morning is the SPDR KBW Mortgage Finance (NYSEArca: KME), which is down nearly 4%.

Home sales in July fell 27%, the largest monthly drop on record. The drop not only sparked fears about the recovery in the housing market, but about the broader economy. Homes in the low- to mid-price range were hardest hit. With slowing home sales, inventory is also rising: there’s now a 12.5 month supply at the current pace. The glut can’t be good news for homebuilders; SPDR S&P Homebuilders (NYSEArca: XHB) is down 1.4% so far today and it has lost 19.1% in the last three months. [Homebuilder ETFs Take Hits.]

Real Estate ETFs, Homebuilder ETFs

With the prospects of a U.S. recovery looking dimmer, the Japanese yen soared to a 15-year high against the U.S. dollar and a nine-year high against the euro. This puts Japan in a quandary, since its officials have been looking for ways to curb the climb. CurrencyShares Japanese Yen Trust (NYSEArca: FXY) is up 1.5% so far today, and it’s gained 9.3% in the last year. [Currency ETFs: What’s In It for You?]

Japanese Yen ETF

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. 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.