The pandemic has sparked a migration to the suburbs, and homebuilders are seeing strong new home sales.

The coronavirus outbreak sparked whole new trends including a massive jump in online ordering and digital payments, the wholesale conversion to “work-from-home,” and the decimation of business prospects for movie theaters and restaurants. But homebuilders may be in clover.

Consider this:

Sales of new homes surged an unprecedented 55% year on year in June, according to a monthly survey by John Burns Real Estate Consulting (JBRC). It was the single biggest jump recorded after the resumption of home-building post- the housing crash over a decade ago, according to CNBC.

Inventories of new, unsold homes dropped 20% year on year to a mere 1.5 months of supply.

What’s working for home construction companies?

Several factors:

• The sudden scarcity of both existing homes, and new, unsold houses available for sale
• Rising demand for brand new, modern homes with rooms for home-schooling and home-office
• A pandemic-driven trend to move away from cities to suburbs and exurbs as work-from-home becomes a long-term reality. “I believe a lot of computer-oriented people have proven to their co-workers that they can be productive from home, and have sensed, or officially been given the green light, to work from home at least a significant portion of the time after a vaccine has been found,” said John Burns, Founder and CEO of JBRC, to CNBC.
• Pent-up demand that was suppressed during the pandemic may be resurging after the economy’s restart
• Near-record low mortgage rates

Unsurprisingly, the sharp U-turn in trend has enabled homebuilders to raise prices.

These are all bullish for ETFs centered on the theme of home construction. However, it is also likely that if the virus continues to get out of hand and causes more sections of the economy to shut down again, these housing gains may be lost.

Nevertheless, here are 3 homebuilder ETFs:

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