Week in Review - Roulette

The House Always Wins

PERSPECTIVES

Some investors are betting on the housing market to lead the U.S. economy out of recession. Record-low interest rates have spurred demand. 

This week, the National Association of Home Builders announced a record high homebuilding confidence index. Along with low interest rates, spurts of refinancing and relocation from urban areas drive this confidence.

XHB is up almost 10% (+9.9%) over the last 6 months and a white hot 117.3% since the market low in March, while ITB, the iShares Home Construction ETF, reached +12.5% and 134.4% for the same periods. For those looking for lower risk, broader market exposure, and reduced costs, SCHM presents an opportunity.

Unlike many of today’s sectors with momentum, P/Es for homebuilders are in realistic territory. Low interest rates and all-time high lumber prices buoy demand, while the specter of a potential infrastructure initiative after the election has kept the party lights on high. 

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Have a great week!

Best,

John DiBenedetto and the Portformer Team

John DiBenedetto

Sales | Business Development | Customer Success

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