SPDR S&P Homebuilders (NYSEArca: XHB) was down more than 1% in early trading Thursday following a report that U.S. housing starts fell more than expected last month.
The builder ETF was on a 10-day winning streak heading into Thursday’s action.
The Commerce Department said housing starts declined 16.5% in April to a five-month low.
“The housing sector has had a bit of a pause recently but the permits data suggests the momentum will resume,” said David Sloan, a senior economist at 4Cast Inc., in a Bloomberg News report.
The iShares U.S. Home Construction ETF (NYSEArca: ITB) was also off over 1% Thursday morning.
The homebuilder ETFs have been outperforming the S&P 500 the past month on signs the housing recovery is gaining momentum.
ITB is up about 23% year to date compared with a gain of 17% for the S&P 500.