Builders are scaling back in a tough market, analysts say.
“After builders halted the freefall in their community counts in 2009, they shifted quickly to turnaround mode during the tax credit period of 2010,” said Nishu Sood at Deutsche Bank. “But after watching demand fall apart post the tax credit, community count growth has leveled off at a tepid pace. The roughly 1% sequential pace of growth the past three quarters is reflective of the extreme caution with which builders are once again approaching new land investments.”
SPDR S&P Homebuilders (NYSEArca: XHB) and iShares Dow Jones US Home Construction (NYSEArca: ITB) invest in homebuilders and related housing stocks.
SPDR S&P Homebuilders
Tisha Guerrero contributed to this article.