Lower Housing Prices Push Home Sales Higher (XHB, ITB, URE)
“The Commerce Department’s data on new home sales did not just rise in June to make a third straight month. The new home sales rose sharply. The headline number came in at an 11% gain to a seasonally adjusted annualized figure of 384,000. Dow Jones had an estimate of a 2.3% gain to 350,000 on an annualized basis. This has the SPDR S&P Homebuilders (NYSE: XHB) and the iShares Dow Jones US Home Construction (NYSE: ITB) on the move,” Jon C. Ogg From 24/7 Wall St Reports.
“We have also seen a drop in inventories as well, down to 281,000 from 292,000 on the market as of now. The data compared to May’s new home sales gaining 2.4% to an annualized figure of 346,000. One of the issues helping the data is the average selling prices. The median price for a new home was $206,200 in June, which is down 12.0% from the $234,300 reported back in June-2008 and down still on a monthly basis from May-2009 at $219,000,” Ogg Reports.
We have posted the profiles of 3 ETF’s below which would benefit from a housing recovery:
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The investment (XHB) seeks to replicate, net of expenses, the S&P Homebuilders Select Industry Index. The fund will invest at least 95% of assets in securities that comprise the index. The index represents the homebuilding sub-industry portion of the S&P TMI.
The investment (ITB) seeks investment results that tracks Dow Jones U.S. Select Home Construction index. The fund generally invests at least 90% of assets in securities of the Underlying index and depositary receipts representing securities of the Underlying index. It may invest the remainder of assets in securities not included in its Underlying index but which BGFA believes will help the fund track Underlying index, and in futures contracts, options on futures contracts, options and swaps as well as cash and cash equivalents, including shares of money market funds advised by BGFA.
The investment (URE) seeks daily investment results, before fees and expenses, which correspond to twice the daily performance of the Dow Jones U.S. Real Estate index. The fund normally invests 80% of assets in financial instruments with economic characteristics that should be twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective.
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ETF BASIC NEWS, ITB, URE, XHB
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