“With the notable rise in the 10-year Treasury yield, mortgage rates have also moved higher. When you combine this with the disappointing earnings results out of Home Depot, this raises concerns about homebuilding stocks,” according to CNBC.
Regarding ITB, the ETF has been in a lengthy slump and is dangerously close to entering a bear market.
“The ITB was already underperforming the rest of the stock market. In fact, it has spent most of the past 2½ months in correction territory and now stands 18 percent below its January highs,” reports CNBC. “Even more critically, it is testing the key $38 support level. It has tested this line many times since early March, so if it finally breaks below that line in any meaningful way (which would also take it below its 200-day moving average), it would be quite negative for the group.”
For more information on the housing market, visit our homebuilders category.