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iShares U.S. Home Construction ETF (ITB)

  • Nov. 19, 2014, 8:57 AM
    • Single-family starts in October of 696K (the highest pace since Nov. 2013) were up 4.2% from September, while far-more-volatile multi-family starts fell 15.5%.
    • Overall housing starts 1.01M were up 7.8% from a year ago.
    • Full report
    • Home construction ETFs: ITB, XHB
    • Previously: Housing starts fall 2.8% in October
    | 1 Comment
  • Nov. 18, 2014, 3:56 PM
    • The IPO market remains hot - 344 companies have filed to go public so far this year, the most in a decade - but not so for homebuilders. After eight builders raised $1.77B issuing new shares in 2013 and 2014's first half - the first IPOs since 2004 - the momentum has faded as the pace of new home sales remains sluggish.
    • “The public equity market right now is not an attractive place,” says Utah-based Woodside Homes chief Joel Shine. His company filed for an IPO in March, but instead decided to raise capital from existing investors and by issuing $50M of debt. The company in H1 posted sales roughly flat with that of a year ago.
    • Of the eight builder stocks gone public sine 2013, five - TPH, CCS, WLH, UCP, TMHC - now trade for less than their IPO prices, while two - NWHM, WCIC - are modestly higher. Only one - LGI Homes (NASDAQ:LGIH) - has significantly outperformed the S&P 500.
    • ETFs: ITB, XHB
    | Comment!
  • Nov. 18, 2014, 10:13 AM
    • “Growing confidence among consumers is what’s fueling this optimism among builders,” says NAHB Chairman Kevin Kelly, a home builder and developer from Wilmington, DE. “Members in many areas of the country continue to see increasing buyer traffic and signed contracts.”
    • This month''s read of 58 is four points higher than October, and three points better than consensus estimates.
    • The index of current sales conditions rose five points to 62, while the index for futures sales gained two points to 66. An index gauging prospective buyer traffic added four points to 45.
    • ITB +0.5%, XHB +0.6%
    • Previously: NAHB Housing Market Index
    | Comment!
  • Nov. 10, 2014, 10:08 AM
    • Releasing preliminary FQ4 results ahead of a conference presentation, Toll Brothers reported sizable year-over-year sales gains both in terms of units and dollars. The ASP of homes delivered of $747K was up 6.3% from a year ago. The ASP of signed contracts in FQ4 of $757K was up 5%.
    • PulteGroup (PHM +2.6%) is also benefitting from an upgrade to Buy at BofA. Others: Lennar (LEN +2.7%), D.R. Horton (DHI +2.1%), Ryland (RYL +3.1%), Hovnanian (HOV +3.4%), KB Home (KBH +3.1%).
    • ETFs: ITB, XHB
  • Oct. 29, 2014, 8:52 AM
    • The share of occupied homes in which homeowners live fell nearly a full percentage point over the last year to 64.4%, says the Census Bureau, the smallest ratio since 1994. Alongside that number, naturally, the share of rentals that are vacant fell to its lowest since the mid-90s.
    • The story is a familiar one: Tight lending conditions and an anemic recovery coming alongside rising prices for entry level homes as institutional investors gobble up the available supply.
    • Homebuilder ETFs: ITB, XHB
  • Oct. 28, 2014, 9:52 AM
    • "There is a chance of home prices going negative," Robert Shiller tells CNBC after the Case-Shiller 20-city composite index rose just 5.6% Y/Y in August, down from 6.7% in July.
    • On a monthly basis, prices increased 0.2%, well shy of expectations for 0.5%, and 0.6% a month previous. Leading the slowdown is the Sun Belt which reported its worst annual returns since 2012.
    • "In housing, boring is better," says Zillow's Stan Humphries. Cooling price appreciation and more inline inventory will give buyers a hand up after several years of sellers being in the driver's seat.
    • ITB +0.5%, XHB +0.3%
  • Oct. 24, 2014, 10:25 AM
    • September new home sales at a seasonally adjusted annualized rate of 467K were 0.2% above August's 466K (revised from 504K), and 17% above the level of a year ago.
    • Inventory stands at 5.3 months of supply at the current sales pace vs. 5.5 months one year ago.
    • On a monthly basis, sales jumped 12.3% in the Midwest, rose 2% in the South, were flat in the East, and fell 8.9% in the West.
    • Full report
    • ITB -0.6%, XHB -0.4%
  • Oct. 23, 2014, 5:18 PM
    • "Many builders indicated that they were having a more difficult time filling positions compared to one year earlier," says the Atlanta Fed in its Construction and Real Estate Survey. "A shortage of labor was noted across many trades, including masons, drywall hangers, framers, electricians, and plumbers."
    • The diffusion index on construction activity and the 90-day outlook fell to its lowest level since about the start of 2012 as a growing number of builders report activity as flat to slightly down.
    • As for buyer traffic, the report from brokers and builders was mixed, with those indicating a decline suggesting seasonal factors and a drop in buyer confidence as being the main factors behind the dip.
    • Homebuilder ETFs: ITB, XHB
    | Comment!
  • Oct. 22, 2014, 3:53 PM
    • While the MBA mortgage application index jumped 11.6% in the week ended October 17, it was a 23.3% surge in refinances leading the way. Purchase applications actually fell 4.6%, are now 9% lower than year-ago levels, and last week made up just 35% of total applications - this despite significantly lower mortgage rates.
    • What it suggests is - for now - lower rates aren't luring homebuyers.
    • Homebuilder ETFs: ITB -0.4%, XHB -0.9%.
    • Previously: Refinancing leads jump in mortgage applications
    | Comment!
  • Oct. 21, 2014, 10:45 AM
    • September existing-home sales of 5.17M (at a seasonally adjusted annualized rate) is up from 5.05M in August, and marks the fastest pace this year, but 1.7% below the level of September 2013.
    • The median existing-home price for all housing types of $209.7K is up 5.6% Y/Y.
    • Total housing inventory of 2.3M homes is off 1.3% and represents a 5.3-month supply at the current sales pace. Inventory is up 6% Y/Y.
    • All cash sales were 24% of all transactions vs. 33% one year ago. Individual investors purchased 14% of homes vs. 19% last year.
    • First-time buyers remain at just 29% off all buyers - they've represented less than 30% of all buyers for the 17th month in the last 18.
    • Full report
    • ITB +1.6%, XHB +1.8%
    | Comment!
  • Oct. 17, 2014, 10:06 AM
    • September housing starts at a seasonally-adjusted rate of 1.017M were 6.3% higher than August and 17.8% higher than a year ago, with single-family starts up just 1.1% from August and volatile multi-family starts up a big 18.5%.
    • Building permits rose 1.5%, with single-family permits down 0.5% and multi-family up 7%.
    • Full report
    • Homebuilder ETFs: ITB +1.1%, XHB +1%
    • Previously: Housing Starts rise in September
  • Sep. 24, 2014, 10:25 AM
    • Bond prices are mostly snoozing through the August New Home Sales report showing sales of single-family homes surging 18% to a six-year high of 504K (seasonally adjusted annual rate). Expectations had been for a pace of 426K. The 504K print is 33% higher than August one year ago.
    • Also ignoring the volatile number and instead focusing on weak results from KB Home, the ITB is lower by 0.8%.
    • The 10-year Treasury yield has actually dropped nearly two basis points since the print, now flat on the session at 2.53%. TLT flat.
  • Sep. 24, 2014, 10:12 AM
    • iShares U.S. Home Construction ETF (NYSEARCA:ITB) announces quarterly distribution of $0.0214.
    • 30-Day SEC yield of 0.28% (as on 08/31/2014).
    • Payable Sept. 30; for shareholders of record Sept. 26; ex-Div. Sept. 24.
    | Comment!
  • Sep. 18, 2014, 3:05 PM
    • That's hard to believe given single-family housing starts are on a pace of 622K this year, after 618K a year ago - a far cry from the pre-bubble average of 1.1M in the 1990s. Trouble is, says Kelko, the historical norm doesn't say what the level of construction should be now. Instead, look at the rate of household formation.
    • If housing starts run ahead of the rate of household formation, homes sit empty and vacancies rise, and that's just what the latest data from the Census Bureau shows. As opposed to multi-unit rental market where vacancies are falling. Even with an increase in single-family rentals, the overall single-family vacancy rate ticked up to 10.7% in 2013 from 10.6% a year earlier, and vs. 7.4% in the pre-bubble days of 2000.
    • For single-family vacancy rates to get back to normal, even household formation needs to increase or housing starts need to slow. In the meantime, it will be multi-family activity needing to lead the construction recovery.
    • Separately, the former head of Goldman's housing research team says home prices are 12% overvalued today and have already started to slide. "I am lamentably confident that home prices will fall by 15% within three years."
    • Homebuilder ETFs: ITB, XHB
  • Sep. 18, 2014, 8:52 AM
    • August housing starts of 956K fell 14.4% from July's 1.1M, and were 8% higher than a year ago. Single-family starts of 643K fell 2.4% from July, making volatile multi-family starts the key to August's drop.
    • Building permits of 998K declined 5.6% from July and were up 5.3% from a year ago.
    • Full report
    • The iShares DJ U.S. Home Construction ETF (NYSEARCA:ITB) is lower by 0.35% premarket. The more homebuilder supply-focused XHB shows no premarket action.
    | 1 Comment
  • Sep. 17, 2014, 10:50 AM
    • “Since early summer, builders in many markets across the nation have been reporting that buyer interest and traffic have picked up," says NAHB Chairman Kevin Kelly. On the other hand, says NAHB Chief Economist David Crowe, "We are still not seeing much activity from first-time homebuyers."
    • This month's increase in the headline Housing Market Index to 59 was the fourth straight gain, and brought the level to its highest since November 2005.
    • ITB +3%, XHB +1.8%
    • Previously: Homebuilders party after Lennar results
    | Comment!
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ITB Description
The iShares Dow Jones U.S. Home Construction Index Fund seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Dow Jones U.S. Select Home Construction Index.
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