Home Construction ETF hits record high as real estate explodes


The iShares Home Construction exchange-traded fund hit a new 52-week high this week and is poised to rise even further amid strong consumer demand for new and existing homes.

The ETF, which currently provides investors with exposure to 46 US companies that make residential homes, has risen more than 40% this year and manages more than $ 3 million in assets.

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The most weighted stocks in the ETF include DR Horton, Lennar Corporation and NVR.

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Despite the low level of inventories and rising house prices, sales of existing homes rose 0.8% in October at a seasonally adjusted rate of 6.34 million units, the fastest pace since January, while pending house sale, which tracks the number of homes under contract for sale, rose 7.5% to 125.2 in October.

The median price of existing homes in October jumped 13.1% year-over-year to $ 353,900, marking a record 116 consecutive months of year-over-year increases. The median price of existing single-family homes jumped 13.5% year-on-year to $ 360,800 in October, while the price of existing condominiums rose 8.7% year-on-year to $ 296,700.

The total housing stock in October fell 0.8% month over month and 12% year over year to 1.25 million units. The unsold inventory, which represents a supply of 2.4 months at the current selling rate, remains unchanged from the previous month and is down from 2.5 months a year ago.

First-time buyers accounted for 29% of existing home sales in October, down from 28% in September and down from 32% in October 2020, while individual investors or second home buyers bought 17% of homes in October, compared to 13% in September and 14% in October 2020.

National Association of Realtors Chief Economist Lawrence Yun Says Job Growth Continues, Stock Market At All-Time Highs and Rising, But Mortgage Rates Still Historically Low Help Boost Home Sales .

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The iShares Home Construction ETF is not the only fund to see momentum, as the SPDR Homebuilders ETF, the Invesco Dynamic Building & Construction ETF and the Direxion Daily Homebuilders & Supplies Bull 3x ETF have also recently flirted with records.

ETFs are up 51%, 34.6% and 179.6% respectively this year at the time of publication.