New existing home sales numbers are in, and home construction and real estate exchange traded funds (ETFs) went higher on investors’ hopes that the slump is approaching the bottom.
Martin Crutsinger for the Associated Press reports that existing home sales dropped to a nine-year low, and the median price for a home dropped for the fifth consecutive month.
The National Associated of Realtors said that single-family home sales and condominiums dropped by 0.4%, to 4.89 million units. The media price for a home sold in January is $201,000, down 4.6% from a year ago. Sales dropped everywhere but in the Midwest, where they actually rose 3.4%.
How low can we go? That’s what Wall Street was wondering after the report was issued, and the general mood was optimistic that a rebound could be coming later this year, says Joe Bel Bruno for the Associated Press.
But be careful: the market has been seeing some quick swings as investors sense a bottom and buy, then quickly cash out when it becomes apparent that it isn’t the case. We suggest, as usual, waiting for a fund to move above its trend line before diving in.
Some ETFs that have inched higher today on the housing news are:
- iShares Dow Jones US Real Estate (IYR), down 2.9% year-to-date
- iShares Dow Jones US Home Construction (ITB), up 5.9% year-to-date
- SPDR S&P Homebuilders (XHB), up 6% year-to-date
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.