The SPDR S&P Homebuilders ETF (NYSEArca: XHB) and the iShares U.S. Home Construction ETF (NYSEArca: ITB) have been standout performers as U.S. stocks have wilted in recent weeks.
Over the past month, the two largest homebuilders exchange traded funds are up an average of 7.8%. On Wednesday, another miserable day for U.S. stocks, XHB was one of just nine ETFs to hit a 52-week high and both that fund and ITB reside near their highest levels in more than eight years.
The homebuilder market has been growing on an improved economy, rebounding housing market and rising confidence in the sector. The National Association of Home Builders revealed that builder confidence in the market for new single-family homes rose to a seasonally adjusted 61 in August, its highest level since November 2005, reports Anna Louie Sussman for the Wall Street Journal. Readings above 50 reflect positive conditions.
The index of builder confidence hovered above 60 in July and June, and it has remained positive for the past year.
The positive reading is adds to a number of promising indicators in recent months. For instance, the National Association of Realtors said sales of existing homes in June surged to their highest since February 2007. [Home Sales Hit Eight-Year High, Boost Homebuilders ETFs]