The SPDR S&P Homebuilders ETF (NYSEArca: XHB) and the iShares U.S. Home Construction ETF (NYSEArca: ITB) are down 12.1% and 10%, respectively, this year.

Persistent weakness in homebuilders stocks and ETFs despite the fact that 30-year mortgage rates have been in a steady downtrend since the early 1980s and with investors concerned about the Federal Reserve lifting interest rates next year, there is concern ITB and XHB will weaken further if rates rise.

However, rising mortgage rates could serve another purpose: Reducing home prices.

“So what happens if mortgage rates jump to 5 percent next year, a reasonable figure given the odds that the Federal Reserve might start raising interest rates then? That may push the affordability index lower and median sales prices might decline as much as 10 percent. Yet mortgage rates rise for a reason, and an improving economy has the potential to offset some of the impact of increasing rates,” reports Jonathan Miller for Bloomberg.

Of course, there can be no guarantees that ITB and XHB will rise in unison with mortgage rates. At least in theory, these ETFs should have benefited from steadily declining interest rates. Yet, both ITB and XHB reside nowhere near their pre-financial crisis highs. ITB, the iShares offering, would need to more than double to recapture its 2006 high while XHB would need to add about 50% to hit its early 2006 high. [ETFs Still Not Close to Pre-Crisis Highs]

Both ETFs debuted in 2006, the last year of the Fed’s last rate tightening cycle, so the track record for how ITB and XHB perform in rising rate environments is short to say the least. XHB, which is several months older than ITB, lost 16.5% after coming to market in 2006. ITB shed 15.1% after its May 2006 debut.