Real Estate ETFs are in focus as New Home Sales data arrives

view original post

Marat Musabirov/iStock via Getty Images

Real Estate exchange traded funds find themselves front and center as Existing Home Sales data for the month of May declined now in four straight months dating back to Jan. 2022.

May Existing Home Sales figures came in at -3.4% to 5.41M compared to the forecasted 5.40M which was anticipated and 5.60M prior figure that was revised from 5.61M. See below chart of month over month home sales.

As weaker data hits the market investors shift their attention towards funds like the SPDR Homebuilders ETF (XHB), iShares Mortgage Real Estate Capped ETF (BATS:REM), iShares Residential Real Estate Capped ETF (REZ), and Hoya Capital Housing ETF (HOMZ).

At the same time large benchmark ETFs that track the broader real estate market also find themselves on the map. Three examples are the Real Estate Select Sector SPDR ETF (NYSEARCA:XLRE), Vanguard Real Estate ETF (NYSEARCA:VNQ), and the iShares U.S. Real Estate ETF (NYSEARCA:IYR).

Moreover, of the 11 S&P 500 sectors the real estate segment finds itself sitting in eighth place in 2022 after coming in second in 2021.

Year-to-date price action: XHB -36.8%, REM -26.2%, REZ -19.8%, HOMZ -29.5%, XLRE -22.7%, VNQ -22.1%, and IYR -22.3%.

“Home sales have essentially returned to the levels seen in 2019 — prior to the pandemic — after two years of gangbuster performance,” said Lawrence Yun, National Association of Realtors’ chief economist.