“Foreclosures and short sales have gone down, eliminating the sources of many cheap homes. So the more expensive types of transactions, like normal resales and new-home sales, went up. As a result, new-home construction, which was at rock bottom in 2011, also really came roaring back in 2012,” said Michael Orr, director of the Center for Real Estate Theory and Practice at Arizona State University’s W.P. Carey School of Business, in a Bloomberg News report.
The builder ETFs represented a top-performing sector last year as sentiment on the housing market improved. For example, ITB surged 79% in 2012.
“Investors are betting big on the housing recovery,” CNNMoney reports. “Hedge funds and private equity firms have been rushing in to buy up companies and assets in every part of the housing supply chain, including undeveloped land, homebuilders, foreclosed homes, and building parts manufacturers.”
iShares DJ US Home Construction
