Just last week, J.P. Morgan lowered its rating for five homebuilders, citing cautiousness in the sector.

“We are becoming more cautious on the homebuilding sector,” analyst Michael Rehaut said in a note. “We expect the housing recovery to remain fairly tepid in 2019.”

Existing Home Sales Peak

There is further weakness exhibited in the real estate sector as Bank of America said today that existing home sales, the largest segment of the housing market, have peaked and will no longer be an impactful contributor to the growth of the U.S. economy.

“We are calling it,” the Bank of America team led by Michelle Meyer said in a research note on Friday. “Existing home sales have peaked.”

“The peak in existing home sales can largely be explained by the decline in affordability,” added Meyer.

While this all spells doom and gloom for the real estate market, for savvy investors looking to fade real estate, DRV could be the play as the sector begins to show signs of unraveling.

For more real estate trends, visit ETFTrends.com

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