Homebuilders exchange traded funds jumped Wednesday as the housing market recovery picks up the pace with U.S. sales at an eight-year high.
The housing sector was strengthening Wednesday after the National Association of Realtors revealed sales of previously owned homes in June increased 3.2% to a 5.49 million annualized rate, the strongest since February 2007, reports Victoria Stilwell for Bloomberg.
“The market is tighter compared to last year,” Lawrence Yun, NAR chief economist, said at a news conference. “Home values are rising too fast and we need more supply to bring the price growth down, consistent with income growth.”
Low inventory levels have pushed prices to an all-time high, and listed properties are on average only listed for just 34 days, the quickest turnover in four years of record-keeping.
Consequently, the dearth in available inventory and rising home prices may spur homebuilders to step up construction. So far, housing starts have increased 9.8% to 1.17 million annualized rate, the second-highest level since November 2007.
Supporting the rebound in the housing market, an improved job market and recovery in home values have helped more Americans move around and take advantage of the historically low interest rates.