By Kevin Grewal, editorial director at SmartStops.netTo the surprise of many, housing prices showed a bit of prosperity, indicating an improvement in the rate of decline in April and further supporting the optimistic point of view that the U.S. housing slump is nearing a bottom. But is this just wishful thinking or is a trend emerging?
In addition, discouraging news from the Commerce Department regarding construction spending further accentuates the industry's economic woes. Total construction spending dropped by 0.9% in May, with residential building falling by 3.4% after posting a flat reading in the prior month. Finally, companies have to start hiring and stop handing out pink slips. After all, without a job how does one obtain a loan? Whatever the fate of the sector may be, the following stocks and ETFs will be affected: Lennar ( LEN), which is up 65% from a March low of $5.87 to a June 30 close of $9.69.
Simon Property Group ( SPG), which is up 96% after witnessing a March low of $26.19 to close at $51.43 on June 30. DR Horton ( DRI), which is up from a January low of $5.26 to close at $9.36 on June 30, a jump of 78%. iShares Dow Jones U.S. Real Estate ( IYR), which closed at $32.42 on June 30 after hitting a March low of $22.21, an increase of 46%. SPDR S&P Homebuilders ( XHB) which is up 43% from a March low of $8.23 to close at $11.75 on June 30. When considering these stocks or ETFs, keep in mind that they come with risks. To help moderate these risks, a sound exit strategy is of utmost importance. According to the latest data from SmartStops.net here are the price levels where the uptrend of these stocks and ETFs would be over: Lennar at $8.98; Simon Property at $47.52; DR Horton at $31.37; IYR at $30.32; XHB at $11.20. These levels change daily and updated data is free at SmartStops.net.