Housing ETFs Near 8-Year Highs

The bears love to hate the housing sector, and for years they have been on the wrong side of the trade. On Tuesday, the new home sales number was released, and it crushed estimates. Within the report, the January number was revised higher to 500k, marking the first time sales have hit at least 500k in consecutive months since early 2008.

Last week, one of the nation's largest homebuilders, KB Home KBH crushed earnings estimates when it announced its first quarter data. For the quarter ending February 28, the company reported revenue of $580 million, up 28 percent year-over-year and beating estimates by $105.2 million. Earnings per share came in at $0.08, beating estimates by $0.06.

Homebuilder ETFs

The largest homebuilder ETFs on the market, the

iShares Dow Jones US Home Const. (ETF)ITB

and the

SPDR S&P Homebuilders (ETF)XHB

, have been performing well this year following a slew of positive data mixed in with a handful of troubling numbers.

ITB is up 8 percent in 2015 and within 1 percent of a new eight-year high. XHB is also up 8 percent in the new year and within striking distance of a new eight-year high.

iShares Dow Jones US Home Construction

ITB follows 37 U.S. companies that are in some way involved with the construction of residential homes. The top weighted sectors in the ETF are household durables at 70 percent and building products at 13 percent.

The top individual holdings include:

D.R. Horton, Inc. DHI
LEN with 10.8 percent allocations
PulteGroup, Inc. PHM coming in at 8.8 percent

KBH is the fourteenth ranked holding in ITB at 2 percent. Over the last 12 months, ITB is up 14 percent and up 18 percent over the last six months. The ETF has an expense ratio of 0.43 percent.

SPDR S&P Homebuilders

XHB tracks 37 U.S. companies that are involved with the construction of residential homes. The ETF is distributed across six sectors, with homebuilding at 34 percent and building products at 27 percent coming in at the highest weighted sectors.

The top holdings include:

Select Comfort Corp. SCSS at 3.7 percent
Ryland Group Inc RYL making up 3.6 percent
Standard Pacific Corp. SPF with a 3.6 percent holding as well

XHB is up 20 percent over the last 12 months and up 19 percent over the last six months. The ETF has an expense ratio of 0.35 percent.

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Homebuilder ETFs

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