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Is the Worst Over for Housing Stocks & ETFs?

  • (1:00) - Breaking Down The Current Housing Market: Affordability Continues To Decline

  • (8:15) - Should We Expect A Housing Crash Like 2008?

  • (14:30) - What Is An iBuyer and What Do They Do?

  • (20:50) - What Are The Rental Trends Around The United States

  • (25:20) - Will Homebuilders Continue To See Growth?

  • (31:40) - Stocks and ETFs To Keep On Your Radar

  • Podcast@Zacks.com

 

In this episode of ETF Spotlight, I speak with Zacks Senior Equity Strategist, Tracey Ryniec, about the housing market. As the Federal Reserve continues to raise rates aggressively, the housing market has plunged from its pandemic-driven highs.

The average rate on a 30-year, fixed-rate mortgage had surged to over 7% last month, up from about 3.45% at the start of the year. Homebuyers now need to earn a six-figure income to afford the monthly mortgage payment on a median-priced home, up almost 50% from a year ago, per Bloomberg,

Shares of home builders look very cheap, but Tracey believes it is still too early to buy the dip. Interest in home renovations and improvements remains relatively strong, and those stocks have fared slightly better this year.

The iShares U.S. Home Construction ETF ITB and the SPDR S&P Homebuilders ETF XHB have rebounded in November but are still down about 26% year-to-date.

ITB tracks a market cap weighted ETF of home construction and related stocks. It is top heavy with four holdings--D.R. Horton DHI, Lennar LEN, NVR NVR and PulteGroup PHM--accounting for about 45% of the portfolio.

XHB is an equal-weighted ETF that has significant exposure to building-products and home-furnishing companies as well in addition to homebuilders.

Toll Brothers TOL, the luxury homebuilder, and Beazer Homes BZH, which builds affordable homes, are both currently ranked Zacks Rank #5 (Strong Sell), but are worth watching.  Investors could also add Williams Sonoma WSM, Pool POOL and Trex (TREX) to their watchlists.

Tune in to the podcast to learn more about these stocks and ETFs.

Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Pool Corporation (POOL) : Free Stock Analysis Report
 
PulteGroup, Inc. (PHM) : Free Stock Analysis Report
 
Toll Brothers Inc. (TOL) : Free Stock Analysis Report
 
Lennar Corporation (LEN) : Free Stock Analysis Report
 
D.R. Horton, Inc. (DHI) : Free Stock Analysis Report
 
WilliamsSonoma, Inc. (WSM) : Free Stock Analysis Report
 
Beazer Homes USA, Inc. (BZH) : Free Stock Analysis Report
 
NVR, Inc. (NVR) : Free Stock Analysis Report
 
Trex Company, Inc. (TREX) : Free Stock Analysis Report
 
SPDR S&P Homebuilders ETF (XHB): ETF Research Reports
 
iShares U.S. Home Construction ETF (ITB): ETF Research Reports
 
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Zacks Investment Research