The recovery in U.S. housing has been the pervasive theme since the financial collapse and has offered some of the best returns in the market. Extreme uncertainty over subprime loans and falling real estate prices drove homebuilders and building products to fire-sale prices by 2011. Hindsight, curse that it is, has most of us looking back at the triple-digit gains in some housing-related companies over the two years to mid-2013 and wondering why we couldn’t see the writing on the wall. #-ad_banner-#But you shouldn’t beat yourself up too badly — you just might get another chance. The SPDR S&P Homebuilders… Read More
The recovery in U.S. housing has been the pervasive theme since the financial collapse and has offered some of the best returns in the market. Extreme uncertainty over subprime loans and falling real estate prices drove homebuilders and building products to fire-sale prices by 2011. Hindsight, curse that it is, has most of us looking back at the triple-digit gains in some housing-related companies over the two years to mid-2013 and wondering why we couldn’t see the writing on the wall. #-ad_banner-#But you shouldn’t beat yourself up too badly — you just might get another chance. The SPDR S&P Homebuilders Index Fund (NYSE: XHB) has underperformed the market with a gain of just 11% over the last year and a loss of 1% over the past six months. The weakness is in stark contrast to the 60% gain the index posted in the two years to mid-2013, along with triple-digit gains in shares of homebuilders like KB Homes (NYSE: KBH) and Hovanian Enterprises (NYSE: HOV). Weakness in housing-related stocks follows abysmal housing data over the last six months of 2013 and the first quarter of this year. Against winter weakness and the disappointing spring selling season comes strong evidence of… Read More