Homebuilder exchange traded funds (ETFs) continue to be challenged, much like the broader real estate market. After losing more than 20% in the last three months, is there hope yet for these ETFs?

The National Association of Home Builders said its monthly index of builders’ sentiment about the housing market fell to 13, the lowest reading since March 2009. Any reading below 50 marks a negative sentiment.

According to the Associated Press, factors that are contributing to the sluggish homebuilders sector are jobless and unemployment rates, brisk sales of bargain-bin foreclosure properties, tight credit  and a prediction that prices are going to further fall. [What’s Behind the Homebuilders Numbers?]

On the other hand, home improvement store Lowe’s (NYSE: LOW) has reported a strong second quarter, thanks to sales of grills and air conditioners this summer. Right there, you can see the benefits of diversification.