Homebuilder ETFs: What Investors Need To Know

One area of the economy that has definitely been a bright spot is housing. This important sector has seen great data as of late while better employment figures and higher consumer confidence haven’t hurt matters either.

Just recently, we saw existing home sales which were well ahead of expectations, while new home buyers are finally coming to the market too. To top things off, the recent new homes sales report also beat expectations and continued a string of 500,000+ in new home sales.

Housing Investing in Focus

Clearly the housing sector is seeing strong data and it might be time to consider the space for investment. If you don’t want to make a bet on a specific sector—and instead would prefer a sector approach-- there are several ETFs which could be to your liking.

However, there are actually some key differences between the trio of funds targeting this market, producing very different returns. (ITB - ETF report) tracks only home-builders but has materials companies too, (HOMX - ETF report) only has home-builders and nothing else, while (XHB - ETF report) includes home-builders but also companies further down the line like Home Depot and Bed Bath and Beyond which benefit from a stronger housing market.

But for a more in-depth look at these housing ETFs and what sets them apart, make sure to watch our short video below. In it, I discuss the recent trends in the housing market, along with a closer look at what the main differences between the top ETFs in this important market are, make sure to watch.

Video length: 00:06:00



 

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