Alternative Investments: A Pivotal Change in Trend of New Home Sales? Homebuilder ETFs To Consider

https://dailyalts.com/wp-content/uploads/2020/07/new-home-1664272_640.jpg

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:

Ticker Fund Name Issuer AUM Expense Ratio 3-Mo TR
BATS: ITB iShares U.S. Home Construction ETF Blackrock $1.58B 0.42% 33.00%
NYSEARCA: XHB SPDR S&P Homebuilders ETF State Street Global Advisors $842.83M 0.35% 30.20%
NYSEARCA: HOMZ Hoya Capital Housing ETF Pettee Investors $19.25M 0.45% 16.80%
Source: ETF.com

 

Related Story:  Outlook On Real Estate ETFs; Is The Worst Over? 

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2022/08/logo-ripple.jpg
Digital Assets: Ripple Labs Eyeing Pieces Of Celsius In Bankruptcy Wreckage
August 10, 2022     Digital Assets, News

Ripple Labs, the blockchain payments company that created the XRP cryptocurrency, is interested in purchasing assets of Celsius Network, the crypto lender that was forced into bankruptcy amidst the meltdown…

https://dailyalts.com/wp-content/uploads/2022/08/Nuri.png
FinTech: German Bank Nuri Files For Insolvency Amidst Macro Environment And Crypto Bear Market
August 10, 2022     Digital Assets, FinTech, News

Nuri, a digital banking platform and app, offered users crypto transactions as well as normal banking activities including a debit card. The firm announced it had filed for insolvency on…

https://dailyalts.com/wp-content/uploads/2022/08/TX-SCARA_Press_1-1-1-1030x644-1.jpg
Artificial Intelligence: AI Robot TX SCARA To Debut In 300 FamilyMart Stores In Japan
August 10, 2022     Artificial Intelligence, Latest News, News

Telexistence Inc., the Japanese robotics company, announced the launch of its TX SCARA restocking robots in 300 FamilyMart convenience stores in Japan later this month as part of its AI-based…

https://dailyalts.com/wp-content/uploads/2022/08/Coinbase-Mobile-–-Splash.png
Alternative Investments/Digital: GraniteShares Launches The First Coinbase Leveraged ETF
August 10, 2022     Alternative Investments, News

US ETF issuer GraniteShares, which first launched leveraged ETFs on single stocks in the UK in 2019, and now offers 106 such products across Europe, has listed a suite of…