Homebuilders ETF (XHB) Soars as Pending Home Sales Jump Record 10.4% in October
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The SPDR S&P Homebuilders (NYSE: XHB) ETF is making a strong run today, following data from the National Association of REALTORS (NAR) showing a record 10.4% increase in the pending home sales index, from 80.9 in September to 89.3 in October. The number is a 180-degree turn from a 1.8% drop in the index for September.
The number was still 20.6% below the 112.4 that the index was at last October.
Commenting on the number, NAR Chief Economist Lawrence Yun said, "It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels. The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011.”
Yun also said that recently originated mortgages are showing lower default he expects the number to continue to climb from cyclical lows seen over the summer, but believes that consumers still have concerns over the mortgage interest deduction.
Breaking down the numbers, on a seasonally adjusted basis, the Northeast saw a 19.6% increase to 71.3, the Midwest popped 27.3% to 81.7 (the strongest of the four), the South saw a 7.1% increase to 93.8, and the West dropped 0.4% to 104.3.
The XHB ETF is up 2.8% this afternoon, with Ryland Group, Inc. (NYSE: RYL) leading the pack, up 6.3% this afternoon.
The number was still 20.6% below the 112.4 that the index was at last October.
Commenting on the number, NAR Chief Economist Lawrence Yun said, "It is welcoming to see a solid double-digit percentage gain, but activity needs to improve further to reach healthy, sustainable levels. The housing market clearly is in a recovery phase and will be uneven at times, but the improving job market and consequential boost to household formation will help the recovery process going into 2011.”
Yun also said that recently originated mortgages are showing lower default he expects the number to continue to climb from cyclical lows seen over the summer, but believes that consumers still have concerns over the mortgage interest deduction.
Breaking down the numbers, on a seasonally adjusted basis, the Northeast saw a 19.6% increase to 71.3, the Midwest popped 27.3% to 81.7 (the strongest of the four), the South saw a 7.1% increase to 93.8, and the West dropped 0.4% to 104.3.
The XHB ETF is up 2.8% this afternoon, with Ryland Group, Inc. (NYSE: RYL) leading the pack, up 6.3% this afternoon.
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