Homebuilder ETFs Surge on D.R. Horton Q4 Results

Home construction stocks and homebuilder-related exchange traded funds climbed Tuesday after D.R. Horton (NYSE: DHI), the largest U.S. homebuilder, reported its highest growth in orders in over a year, revealing the underlying strength of the housing market.

On Tuesday, the SPDR S&P Homebuilders ETF (NYSEArca: XHB) rose 3.0%, iShares U.S. Home Construction ETF (NYSEArca: ITB) gained 4.0% and PowerShares Dynamic Building & Construction Portfolio (NYSEArca: PKB) advanced 3.0%.

Meanwhile, DHI shares jumped 6.4% Tuesday, it’s largest intraday percentage jump since 2015. DHI makes up 4.6% of XHB’s underlying holdings and 12.6% of ITB.

D.R. Horton and other homebuilders also strengthened on data showing U.S. home resales dipped more than expected in December as the supply of houses on the market fell to levels last seen in 1999, reports Arunima Banerjee for Reuters.

Horton revealed that orders, an indicator of future revenue for homebuilders, increased 14.6% to 9,241 homes in the quarter ended December 31. The company saw good sales trend in January very early into Spring.

The company also calculated that the average selling price for the quarter was $297,000, or up 2% year-over-year.