Housing Stocks Rallied Then Came to a Halt in December


Dec. 4 2020, Updated 10:53 a.m. ET

ITB fell 4.7% over the past month

Housing has been a bright spot in the US economy. But over the past month, housing stocks haven’t been performing well. The iShares US Home Construction ETF (ITB), a housing-focused fund, has fallen 4.7% over the past month as of December 29, 2015. It rose 4.1% over the past three months and 6.4% from a year ago.

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DHI and LEN have more weight in ITB

ITB’s top holdings include DR Horton (DHI), Lennar (LEN), NVR (NVR), PulteGroup (PHM), and Toll Brothers (TOL). DHI and LEN hold double-digit weights of 12.0% and 10.2%, respectively, in ITB. NVR, PHM, and TOL hold 7.7%, 7.4%, and 7.2% in ITB as of November 29, 2015.

Housing stocks didn’t perform well over the past month

Over the past month, DHI, LEN, NVR, PHM, and TOL have fallen 1.2%, 5.2%, 1.9%, 7.8%, and 9.6%, respectively, as of December 29, 2015. None of the top five holdings of ITB are trading above their 20-day moving averages. Only DHI and NVR have surpassed their 100-day moving averages.

Bullish crossover

For DHI and NVR, their 20-day moving averages are crossing over their 100-day moving averages. It’s considered a bullish crossover. Analysts estimate a rise of 4.6% for DHI and a fall of 8.1% for NVR over the next 12 months.

This may be because NVR rose about 5.9% in the last three months. LEN has risen 2.0%, while PHM and TOL have fallen 5.6% and 2.4%, respectively, over the past three months.

Analysts estimate a rise of 11.5%, 16.7%, and 19.5% for LEN, PHM, and TOL, respectively, in the next 12 months. So housing stocks are expected to be upbeat for the US economy.

But we should understand what made housing stock fall over the past month, In the next article, we’ll take a look at data relating to that fall.


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