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SPDR Homebuilders ETF (XHB)

  • Apr. 25, 2014, 4:43 AM
    • The amount that lenders originated in mortgage loans plunged 58% on year Q1 to a 14-year low of $235B, almost entirely due to drop in refinancing. The figures are from industry newsletter Inside Mortgage Finance.
    • Loans for acquisitions were flat on year and lower than in Q4.
    • The trend is the latest indication that increasing interest rates are hampering the housing recovery. The average 30-year fixed-rate mortgage was 4.5% last week, up from 3.6% in May last year, when rates spiked after the Fed indicated it would scale back its QE program.
  • Apr. 24, 2014, 1:21 PM
    • The iShares DJ U.S. Home Construction ETF (ITB +2.7%) gains as earnings roll in from D.R. Horton, PulteGroup, Ryland, and M/I Homes. While PulteGroup saw slowdowns in closings and new orders, but offsetting increases in prices, D.R. Horton reported sales, new orders, and prices all on the rise. DHI is ahead 8%, Pulte 3%, Ryland (RYL +2.2%), M/I Homes (MHO +5.9%).
    • The SPDR S&P Homebuilders ETF (XHB +1.2%) is more of a homebuilding supply play.
    • Other builders: NVR (NVR +3.4%), Lennar (LEN +3.5%) Standard Pacific (SPF +2.8%), M.D.C. Holdings (MDC +3.2%), Hovnanian (HOV +2.5%), Toll Bros (TOL +4.2%).
    | Comment!
  • Apr. 23, 2014, 10:19 AM
    • The seasonally adjusted new home sales pace of 384K in March is 14.5% below that of February and 13.3% lower than a year ago. It's the slowest pace since July, and 14.5% is the 3rd-largest decline in 20 years. The median sales price of $290K is up 12.6% Y/Y. The supply of new homes on the market is 6 months at the current sales pace, up from 5 months in February.
    • Homebuilder ETFs: ITB -1.7%, XHB -1.2%.
    • Toll Brothers (TOL -1.6%), Lennar (LEN -1.9%), Hovnanian (HOV -1.5%), Pulte (PHM -1.6%), KB Home (KBH -3.3%), Beazer (BZH -2.4%), Ryland (RYL -2.6%)
    • The 10-year Treasury yield dips two basis points to 2.69%. TLT +0.4%, TBT -0.8%
    • Full report
  • Apr. 22, 2014, 3:54 PM
    • United Technologies (UTX +0.9%) CFO Greg Hayes says Q1's 19% Y/Y rise in orders for the company's Carrier heating and cooling systems - despite the harsh winter weather conditions - suggests growing strength in the U.S. housing market.
    • Hayes says Carrier's residential business historically has proven a reliable indicator about the state of the U.S. housing market; in 2007, Carrier's sliding sales foreshadowed the coming housing bust, but "here it is 2014 and it's going the other way, so we feel pretty good about the U.S. economy."
    • Sterne Agee likes what it saw in UTX's Q1 results, reiterating its Buy rating, while RBC Capital calls the quarter a good start on the way toward improved growth through the year.
    • Homebuilder ETFs: ITB, XHB
    | Comment!
  • Apr. 21, 2014, 9:57 AM
    • "The loss of momentum is likely a temporary one," says Fannie Mae chief economist Doug Duncan, nevertheless downgrading the company's outlook for housing due to a "lackluster" sales environment. His team now expects housing starts to rise to about 1.05M units this year from 925K in 2013. That's about 50K less than Fannie expected at the start of the year.
    • As for sales, those for existing homes may have remained flat, but Fannie continues to believe new home sales will increase at a double-digit pace.
    • Homebuilder ETFs: ITB, XHB
    | Comment!
  • Apr. 16, 2014, 8:46 AM
    • March housing starts of 946K were 5.9% higher than a year ago and compare to 920K in February (revised from 907K). Single-family starts of 635K were up 6% from February.
    • The market seems focused on permits, which fell to 990K from February's 1.014M. On a Y/Y basis, though, permits gained 11.2%.
    • The 10-year Treasury yield dips two basis points to 2.64%.
    • Homebuilder ETFs ITB and XHB show no trades premarket.
    • Full report
  • Apr. 11, 2014, 4:22 PM
    | 1 Comment
  • Mar. 25, 2014, 10:12 AM
    • February new home sales of 440K (seasonally adjusted, and an annualized rate) slipped 3.3% from January's revised-lower figure of 455K, were 1.1% lower than a year ago. The median price of $261.800 is off 1.2% from a year ago. Houses for sale as of the end of February stands at 189K, representing a 5.2 month supply at the current sales rate.
    • The homebuilders are up, but give up some of their early gain. ITB +0.3%, XHB +0.6%
    • Full report
    | 1 Comment
  • Mar. 21, 2014, 1:46 PM
    • SPDR Homebuilders ETF (XHB) announces quarterly distribution of $0.0349.
    • 30-day SEC yield of 0.35% (as of 03/19/2014).
    • For shareholders of record Mar 25; Payable Mar 31; Ex-div date Mar 21.  
    | Comment!
  • Mar. 20, 2014, 12:31 PM
    • Existing home sales fell Y/Y for the 4th consecutive month, but that issue won't necessarily extrapolate to the builders and new homes. Behind the surge and now contraction in existing home sales is the binge and now slowdown in distressed purchases by Blackstone and other institutional buyers.
    • "The institutional wave has passed," said Blackstone's Jon Gray last week.
    • Nevertheless, the builders are struggling today as the sector mulls a combination of higher interest rates and higher home prices. XHB -0.6%, ITB -0.8%.
    | 1 Comment
  • Mar. 17, 2014, 10:34 AM
    • The iShares DJ U.S. Home Construction ETF (ITB +0.1%) gives back its early gain after a weaker-than-expected report from the National Association of Home Builders shows builder sentiment higher by a point to 47, but falling well short of expectations for 50.
    • Toss the weather into continuing difficulties finding labor and lots, and higher material costs as reasons, says NAHB Chairman (and builder) Kevin Kelly.
    • Index components: Current sales conditions up a point to 52. Buyer traffic up two points to 33. Expectations for the next six months down a point to 53. It's a diffusion index - anything above 50 means more view conditions as good than poor.
    • The more home improvement and supply-related XHB +0.5%.
  • Mar. 14, 2014, 8:23 AM
    • It's about lackluster demand and declining gross margins, says Credit Suisse analyst Daniel Oppenheim, pointing to his firm's monthly "buyer traffic index" survey. It fell two points in February at 36 and compares to a read of 65 in February 2013 and 62 a year before that. The 36 print is the lowest since February 2009 and missed expectations for 50.
    • "We expect the stocks to reflect these observations as macro housing data and homebuilder orders and gross margins come in short of expectations."
    • Wednesday: Credit Suisse pulls Buy ratings on Toll Brothers (TOL), PulteGroup (PHM), and William Lyons (WLH).
    • Monday: More downgrades
    • ETFs: XHB, ITB
    | Comment!
  • Mar. 12, 2014, 9:54 AM
    • The homebuilders are under pressure in early action amid another set of downgrades for individual names (Toll Bros., Pulte, Lyons today), and another slowdown in mortgage applications.
    • The MBA Mortgage Application Index fell 2.1% last week, with the Purchase Index off 1% on the week and 17% from a year ago.
    • Reporting on Credit Suisse's latest monthly agent survey, CNBC's Diana Olick says homebuyer traffic is falling and demand is "underwhelming," but the respondents cite higher rates and home prices, not the weather.
    • XHB -1.3%, ITB -1.7%.
    • Individual names: Hovnanian (HOV -1%), Lennar (LEN -1.2%) D.R. Horton (DHI -1.3%), Ryland (RYL -1.5%), KB Home (KBH -1.9%), Standard Pacific (SPF -1.5%), MDC Holdings (MDC -1.9%).
  • Mar. 12, 2014, 7:21 AM
    • Three more downgrades hit the homebuilders, with Toll Brothers (TOL), PulteGroup (PHM), and William Lyons (WLH) being cut from Buy to Hold at Credit Suisse. At the moment, a combination of higher mortgage rates and higher home prices has the Street worried about the sector.
    • On Monday a different set of homebuilders suffered three downgrades at the hands of BAML and Citigroup.
    • TOL -1.5% premarket
    • ETFs: XHB, ITB
    | Comment!
  • Mar. 10, 2014, 9:58 AM
    • "It's going to be a slower recovery than people had hoped because a number of people have been priced out of the market." says John Burns, head of a home-building consulting firm. Rising home prices are nice for confidence and for the repair they can do to both consumer and lender balance sheets, but - especially coupled with higher mortgage rates - they've put a big ding in affordability.
    • Based on traditional metrics in which the current mortgage payment-to-income ratio stands at 20% vs. a 20+ year average of 24%, things still appear reasonable, but the ratio isn't nearly as favorable for first-time buyers, nor those with lower incomes, smaller down payments, or imperfect credit. This pinch is important because thus far, much of the housing recovery has depended on investors and cash buyers.
    • Builders - no doubt also remembering 2008 - have responded by being slow to ramp up entry-level production, instead focusing on the higher-end market where business remains brisk. The worry, says Thomas Lawler, is construction remains low and prices continue a steep rise, forcing even more out of the market or banks to bypass standard mortgage-qualification rules.
    • Earlier: A number of downgrades hit homebuilding sector.
    • Related ETFs: XHB, ITB
    | 1 Comment
  • Mar. 10, 2014, 7:44 AM
    • Keep an eye on the homebuilding sector today amid a number of downgrades from two separate sell-side teams.
    • KB Home (KBH) suffers a two-notch downgrade to Underperform from Bank of America, which also cuts Meritage Homes (MTH) to Underperform.
    • Citi, meanwhile, removes Buy ratings at D.R. Horton (DHI), New Home Company (NWHM), and Taylor Morrison (TMHC).
    • Related ETFs: XHB, ITB
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