Last week, a report on July new-home sales was much weaker than expected. [Homebuilder ETFs Down Sharply on New-Home Sales Miss]
The July new-home sales data “may mark an ‘uh-oh’ kind of moment for the housing recovery,” said Mark Vitner, an economist at Wells Fargo Securities, in an Associated Press report.
“We’ve been spoiled by low rates,” added Greg McBride, senior financial analyst at Bankrate.com. “People are gnashing their teeth now over a rate we had never seen four years ago.”
The iShares US Home Construction (NYSEArca: ITB) and SPDR S&P Homebuilders (NYSEArca: XHB) are down 18.6% and 9.7%, respectively, the past three months, according to Morningstar.
Full disclosure: Tom Lydon’s clients own XHB.