XHB - XHB: 3 Negatives And 2 Positives For Home Builders

2024-04-23 07:48:08 ET

Summary

• The SPDR S&P Homebuilders ETF has fallen some 10% in April, but is still up substantially from its recent lows in late October.
• High mortgage rates and historically poor home affordability are two of the biggest headwinds facing the industry and the home builder sector.
• However, home builders have very solid balance sheets and dropping lumber prices should help with improving margins slightly.
• Which way will home building stocks head from here? An analysis follows in the paragraphs below.

Some air has started to come out of the home building stocks here in April, after a big move up off the market's recent lows in late October 2023. The SPDR S&P Homebuilders ETF ( XHB ) is down some 10% for the month to date. Which way will the sector go from here? Let's take a look at some of the major headwinds facing the industry, as well as a couple of positives....

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