Homebuilder exchange traded funds were in the red in early trading Wednesday following a Commerce Department report that housing starts fell 8.5% last month. Shares of sector bellwether Toll Brothers (NYSE: TOL) dropped 4% after the company’s quarterly results disappointed Wall Street.
The iShares DJ US Home Construction (NYSEArca: ITB) and SPDR S&P Homebuilders ETF (NYSEArca: XHB) were both down more than 1% at last check.
U.S. housing starts fell 8.5% in January after soaring 15.7% in December. [Homebuilder ETFs Jump on Rising House Values]
“The number disappointed analysts who had been expecting January to add on to several months of evidence the housing market rebound is gaining momentum,” USA Today reported.
“The pattern in the latest housing data is similar to that of other major economic indicators of late,” the LA Times notes. “Job growth, industrial production and retail sales all have weakened at the beginning of this year from upwardly revised numbers late last year, suggesting that the economy was stronger at the end of the fourth quarter than initially thought but is off to a slow start in 2013, possibly as businesses worried about the uncertain outlook on government spending and taxes.”