Exchange traded funds tracking home construction companies remain one of the few areas still showing strength.
SPDR S&P Homebuilders ETF (NYSEArca: XHB) is up 7.1% over the past month and iShares Dow Jones US Home Construction (NYSEArca: ITB) has gained 9.4% over the last month.
Home construction in April rose 2.6% from March to an annual rate of 717,000, with year-over-year housing starts up almost 30%, report Eric Morath and Alan Zibel for the Wall Street Journal. In contrast, economists estimated the numbers would grow at an annual rate of 685,000. [Homebuilder ETFs Rally on Improving Sentiment]
Construction of single-family homes, which accounted for 69% of all housing starts in April, expanded 2.3% and was 18.8% higher year-over-year. Multifamily homes rose 3.2% for the month.
“The improvement in housing is more noticeable now, and manufacturing is pretty solid,” Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc., said in a Bloomberg report.
“It was the first quarter in several years that fundamental demand came in stronger than expected,” Bloomfield Hills Chief Executive Officer Richard Dugas said in the article. “We are pleased with how the year has started off, including a continuation of better sales activity thus far in April.”
SPDR S&P Homebuilders ETF
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Max Chen contributed to this article.