“Home Depot and Lowe’s are the names I would be all over,” Seaburg said in the CNBC article. “I think they are going to continue to move higher. I think you have seen the sweet spot of that market with the reconstruction of houses or the improvement of houses [in the]first leg of the move higher.”
Looking at the homebuilder ETFs, XHB has the largest weights in consumer discretionary names, including 28.7% building products, 15.5% homefurnishing retail, 9.6% home furnishing, 6.3% home improvement retail and 5.9% home appliances. XBH equally weights its holdings and also includes a 3.1% tilt toward Home Depot (NYSE: HD) and 3.2% in Lowe’s Companies (NYSE: LOW).
ITB, on the other hand, leans toward home construction names at 70%, along with 13.3% building products and 8.8% specialty retail.
Alternatively, retailer ETFs may be an unsung play on the homebuilders space as the sector provides indirect exposure to the housing market. For instance, the Market Vectors Retail ETF (NYSEArca: RTH) includes a 8.5% weight in Home Depot and 5.0% in Lowe’s, along with positions in home furnishing retail stores like Target Corp (NYSE: TGT), 3.0% Macy’s (NYSE: M) and 1.6% Bed Bath & Beyond (NYSE: BBBY). [Deflationary Pressures to Support Consumers, Retail ETFs]
SPDR S&P Homebuilders ETF
For more information on the housing market, visit our homebuilders category.
Max Chen contributed to this article.