This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

ETFs for Playing the Housing Recovery

By Kevin Grewal, Editorial Director at

NEW YORK ( TheStreet) -- Over the past few months, the real estate sector has been outperforming analysts' expectations and pleasantly surprising investors. The recovery has also boosted exchange-traded funds that track the sector.

Investors should keep in mind, however, that there are plenty of signs to indicate that these gains are not sustainable or representative of the real health of the sector.

Most recently, the National Association of Realtors reported that existing-home sales increased 10.1% in October over the previous month, on a seasonally adjusted basis. On the surface, this is great news, because home sales traditionally increase in the first half of the year and decline in the second half.

However, this deviation from history has likely been caused by the $8,000 first-time homebuyer tax credit implemented by the Obama Administration. The credit was originally set to expire on Nov. 30, and some experts say that deadline caused many people to rush to complete purchases that they wouldn't have made without the tax credit.

The influx of home buyers has pushed supply and demand closer to equilibrium levels, which has had a positive effect on home prices. The S&P Case-Schiller index, which measures housing prices in 20 major U.S. metropolitan areas, rose by 0.3% to a reading of 144.96 in September. This was the fourth straight monthly increase.

However, there are sources of concern in the latest S&P Case-Shiller report. Of the 20 cities measured, only 11 indicated month-over-month increases. In previous months, larger numbers of cities reported higher prices. Also, on a year-over-year basis, overall prices are still down slightly more than 9%.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
ITB $27.64 0.00%
IYR $79.12 0.00%
XHB $36.34 0.00%
AAPL $128.46 0.00%
FB $78.97 0.00%


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs