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. [Catalysts for Homebuilders ETFs]
Even with those encouraging data points, it pays to remember PKB is not a dedicated homebuilders ETF. Over 26% of the ETF’s weight is allocated to the consumer discretionary sector, including giants like Home Depot (NYSE: HD) and Lowe’s (NYSE: LOW).
Nearly 21% of PKB’s lineup is allocated to infrastructure-related materials names, including Martin Marietta Materials (NYSE: MLM) and Vulcan Materials (NYSE: VMC), indicating increased infrastructure spending could be a positive fundamental catalyst for PKB.
Chart Courtesy: Captain John Charts