NAIL Surged over 137%! What Drives Homebuilding ETFs & Stocks to Hit All-Time High?
What drives the homebuilder ETF surged over 134.57%?
Why the most of homebuilding stocks price hit all-time highs?
If the market tends to continue rise in summer, which company or ticker is in your watchlist?
Welcome to Read:Housing Stock Prices Continue to Skyrocket, Bear Market Nearing End?!
The top 4 homebuilder ETFs with market value over $200M are $iShares U.S. Home Construction ETF(ITB)$ , $SPDR S&P Homebuilders ETF(XHB)$ , $Direxion Daily Homebuilders & Supplies Bull 3X Shares(NAIL)$ , $Invesco Dynamic Building & Construction ETF(PKB)$ .
The $Direxion Daily Homebuilders & Supplies Bull 3X Shares(NAIL)$ sees 134.57% YTD in return. The rest are surged just over 30%.
Why the rise of the ETFs differentiates?
The reason is $Direxion Daily Homebuilders & Supplies Bull 3X Shares(NAIL)$ seeks daily investment results of 300% of the daily performance of the Dow Jones U.S. Select Home Construction Index.
The index measures U.S. companies in the home construction sector that provide a wide range of products and services related to homebuilding, including home construction and producers, sellers, and suppliers of building materials, furnishings, and fixtures.
Symbol | Total Assets ($MM) | YTD | Previous Closing Price |
$2,218.76 | 38.15% | $84.88 | |
$1,261.44 | 30.13% | $79.55 | |
$Direxion Daily Homebuilders & Supplies Bull 3X Shares(NAIL)$ | $232.41 | 134.57% | $74.71 |
$218.74 | 30.22% | $53.53 |
The top 1o holdings of $Direxion Daily Homebuilders & Supplies Bull 3X Shares(NAIL)$ are as below
Besides the ETFs, we see some home builder companies' prices also Hit All-Time Highs.
Checking from Tiger Trade APP. We see 12 out of 27 Homebuilding stocks prices hit all-time Highs. And 19 stocks‘ 2023 YTD surpassed the ITB's 38% YTD 2023.
The Top ten stocks by YTD are $Dream Finders Homes, Inc.(DFH)$ , $Green Brick Partners(GRBK)$, $Hovnanian Enterprises(HOV)$, $Beazer Homes USA(BZH)$ , $M/I Homes(MHO)$, $TRI Pointe(TPH)$ , $PulteGroup(PHM)$, $TopBuild(BLD)$ , $KB Home(KBH)$ , $Landsea Homes Corporation(LSEA)$ all the 10 stocks rise over 60% in 2023, and 3 of them got returns that over 100%.
The Top 10 Stocks by market value are $D.R. Horton(DHI)$ , $Lennar(LEN)$ , $NVR Inc(NVR)$ , $PulteGroup(PHM)$ , $Toll Brothers(TOL)$ , $TopBuild(BLD)$ , $Taylor Morrison Home(TMHC)$ , $Meritage Homes(MTH)$ , $KB Home(KBH)$
Although commercial real estate in the United States has been in a downturn, residential real estate has risen by an average of 30%+.
What Drives the Surge?
The price surge was probably due to the news related to the new residential construction sector that demonstrated positive growth across various metrics. Building permits, housing starts, and housing completions all showed encouraging signs.
Sales of newly constructed homes were up 12.2% in May from April, and up 20% from a year ago.
Along with that, Some home builders companies like $KB Home(KBH)$ reported better-than-expected results for second-quarter fiscal 2023 (ended May 31, 2023), and upbeat views might have triggered optimism for investors.
What’s more, the move came after U.S. home builder confidence rose for a fourth straight month in April.
The New home sales surged in May, as buyers looked to new construction as an alternative to the low inventory of existing homes for sale. Homeowners with ultra-low mortgage rates are reluctant to sell and buy another home at a much higher rate. Sales of existing homes have been down for the past few months, while new home sales have been rising.
May’s month-over-month gain is further evidence that the new construction market is being boosted by the exceptionally low inventory of existing homes for sale.
The home sales potentially climbing by about 5% over the summer, do you have any ticker in your watch list?
“As interest rates and inflation climbed, the homebuilder's sector was getting squeezed from both sides. Supply costs were increasing while high-interest mortgages began scaring buyers away from the market,” said a Direxion Xchange blog post.
“With the latest pause in rate hikes from the Fed mortgage rates could finally level off, That could encourage more buyers to return to the housing market, driving up demand amid already tight supply.”
“Conditions like those could push prices up this summer, a season that already tends to see peak prices for real estate,” “Current forecasts see the number of home sales potentially climbing by about 5% over the summer, The post added.
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