Homebuilders were among the hardest hit sectors during the recent recession, as steep declines in demand for new properties brought this once-booming industry to a standstill. However, the combination of legislative initiatives (such as the home buyer tax credit) and record low interest rates have breathed life into a sector that was recently left for dead. This optimism is visible in the performance of two homebuilder ETFs that are currently available to U.S. investors; the SPDR Homebuilders ETF (XHB) and iShares Dow Jones U.S. Home Construction Index Fund (ITB). Both of these funds have gained at least 10% so far this year, outpacing broad markets by a wide margin. While these two funds are similar in many ways, they are far from identical; below, we take a look at how XHB and ITB stack up side-by-side. [click to continue…]
Over the past 18 months, housing prices have retreated sharply from the highs reached at the end of the housing boom. However, there are reasons to believe that one of the longest and most severe housing slumps ever is nearing an end. Building permits recently increased to a 584,000 yearly pace, well above the forecasted 570,000 and the highest level since November 2008. Construction of single-family houses, which accounted for 84% of the industry last month, increased 2.1% to an annual rate of 482,000, while work on multifamily homes jumped 67% to an annual rate of 92,000. And most recently, home sales for November surged 7.4% over the previous month, reaching the highest level since February 2007 on a seasonally-adjusted basis.
On the high-end side of the market, Robert Toll, CEO of luxury home giant Toll Brothers said during a Bloomberg Television interview on Dec. 11. that “there is a pretty good reservoir of pent-up demand, we don’t know how fast we’re coming back, but we do know we’re coming back.” The company also recently reported a 42% surge in fiscal fourth-quarter orders, suggesting that demand is beginning to come back for luxury homes as well. The increase has not been limited to any one particular area of the country either: gains were recorded in all four regions of the country in November.
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The U.S. housing market, having been battered and bruised during the recent recession, had staged an impressive recovery in recent months as belief that the market has finally hit bottom seemed to gain support. But new data reveals the true fragility of the housing recovery, and indicates that the potential for a “double dip” in [...]
Over the last year, swine flu has been the news story that just won’t die. After an early initial scare, H1N1 faded into the background of the minds of many for several months, before returning in full force as flu season approached. Of course, the threat posed by the disease never really diminished, and health [...]
The National Association of Home Builders’ (NAHB) gauge of confidence of new home sales fell for the first time in four months in October, declining to 17 from a reading of 18 in September. All three components of the index slipped – a first since the peak of the recession in November 2008. The component [...]
