Overall, the housing market is lagging and falling home prices, mixed with low activity, are adding to the prospect of a correction after two months of higher numbers. According to Forex Crunch, the strong rise in new home sales seen Tuesday this week is a welcome surprise and could pave the way for a surprise in pending home sales.
SPDR S&P Homebuilders (NYSEArca: XHB) and the iShares Dow Jones U.S. Home Construction (NYSEArca: ITB) both track the housing market. XHB is up 10% year-to-date.
Foreclosures may have peaked, coming down a bit from the first quarter, with a lower share of distressed sales to existing home sales seen in April. Even as interest rates are falling to their lowest levels in six months, this may not be enough to rally homebuilder shares and ETFs.
Tisha Guerrero contributed to this article.
