Shares of homebuilders and real estate brokers climb even as fears of a recession mount. If US economic growth slows, the Federal Reserve could slow the pace of its rate hikes or end sooner than investors had expected. This is doing well for potential buyers, which in turn would increase demand for homes.
iShares US Home Construction ETF (BATS:ITB) is gain 1.4% in Tuesday afternoon trading, and appears to be on a general upward trend since June 21. Stocks are still down from a month ago, as this chart shows. Since the beginning of the year, the ITB has fallen by 22%.
Among real estate brokers, the largest gains are in technology-focused companies such as Offerpad Solutions (NYSE: OPAD), up 9.2%Compass (NYSE: COMP) +6.9%eXp World Holdings (NASDAQ: EXPI) +9.2%and Redfin(NASDAQ:RDFN) +4.7%. This is also in line with the overall market, where information technology names are doing relatively well compared to other sectors.
Homebuilders, meanwhile, are making decent gains with DR Horton (NYSE: DHI), the largest home builder in the United States, up 1.4%KB Home (NYSE: KBH) +1.8%Pulte Group (New York Stock Exchange: PHM) +2.0%, Hovnan companies (NYSE: HOV) +2.7%and NVR (NYSE: NVR) +2.7%.
In H1 2022, real estate fell 21%, with iBuyer Opendoor Technologies (NASDAQ: OPEN) slips the most.
Last week, the number of homes for sale in June jumped, signaling a slightly cooler market