Higher Home Prices Boosting ITB, XHB

Wyatt Investment Research

U.S. home prices continue to rise. And two homebuilder ETFs are benefitting.

The iShares U.S. Home Construction ETF (ITB) and the SPDR S&P Homebuilders (XHB) ETF are both up today on the good housing news. ITB shares are up 0.6%, while XHB shares are up 0.6%.

The two exchange-traded funds have long been a solid proxy for the recovery of the housing market. ITB shares are up 110% the last two years as the housing market has healed, while XHB shares have risen 88%.

The latest catalyst driving the two ETFs was a 12.8% increase in U.S. home prices in August based on the S&P/Case-Shiller 20-City Composite Index. That’s the biggest annual increase the index has seen since February 2006. It was also a 0.9% increase from July.

The sharp increase in home prices is seen as a strong indicator of the health of the housing market. The more Americans are willing to pay for houses, the stronger the U.S. economy is.

Among housing stocks, Home Depot (HD) is the day’s biggest gainer at +1.3%.



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