The Commerce Department data revealed an jump in the share of homes sold for less than $300,000, which suggests that builders may be looking to target starter-home buyers.
The increase “makes perfect sense when interest rates are low, credit continues to ease, and the consumer is in decent shape given the jobs market,” Brett Ryan, U.S. economist at Deutsche Bank Securities Inc., told Bloomberg. “You’re seeing finally that builders are responding with more supply, and that’s been one of the big problems in the current cycle.”
SEE MORE: Hone in on Homebuilders ETFs
Furthermore, sales have risen 3.5% at building materials stores and 4.3% at furnishing stores.
ITB and XHB both include exposure to home products and retailers, along with their large homebuilders allocations. Specifically, ITB holds 63.8% homebuilding, 15.6% building products, 9.0% home improvement retail, 4.3% home furnishing, 2.5% trading companies & distributors, 2.2% specialty chemicals, 1.3% construction materials and 1.2% forest products. XHB has 33.4% building products, 29.4% homebuilding, 13.2% home furnishing, 9.8% home furnishing retail, 8.6% home improvement retail, 5.6% household appliances.
For more information on the housing market, visit our homebuilders category.
iShares U.S. Home Construction ETF
