Homebuilder ETFs such as iShares DJ US Home Construction (ITB) and SPDR S&P Homebuilders ETF (XHB) dropped nearly 2% in morning trading Monday after the National Association of Realtors said pending home sales fell 4.3% last month.
“The supply limitation appears to be the main factor holding back contract signings in the past month,” said Lawrence Yun, NAR chief economist.
“Supplies of homes costing less than $100,000 are tight in much of the country, especially in the West, so first-time buyers have fewer options,” he added. “We expect a seasonal rise of inventory in the spring to help, but a seller’s market may be developing. Much of the West is already a seller’s market for homes priced under a million dollars, but conditions are much more balanced in the Northeast.”
The two builder ETFs have continued to trade higher in early 2013 after both gained over 50% last year. [Homebuilder ETFs Higher After Housing Starts Jump 12%]
On Tuesday, investors will get latest data on the Standard & Poor’s/Case-Shiller home price index.
iShares DJ US Home Construction
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