Exchange traded funds tracking homebuilders and housing stocks dropped about 4% on Wednesday after a report estimating U.S. pending home sales saw an unexpected decline last month.
SPDR S&P Homebuilders (NYSEArca: XHB) and iShares DJ US Home Construction (NYSEArca: ITB) were sharply lower on the news.
The National Association of Realtors said its pending home sales index fell 5.5% in April to the lowest level of 2012. Also, the figures for March were revised lower.
Economists polled by Reuters had expected a slight gain in April pending home sales.
Wednesday’s homebuilder sell-off pushed XHB back below its 50-day simple moving average.