TheStreet.com Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.NEW YORK ( TheStreet) -- U.S. existing-home sales grew 7.2% in July from June, with new-home sales adding 9.6% for the same period, according to the National Association of Realtors. Buyers are coming out of the woodwork to compete for low-priced foreclosure sales. The ensuing rally pushed the average real estate fund we track up 4.1% for the week ending Thursday, Aug. 27. This gain excludes the inverse funds that sell short the real estate stocks. First-time home buyer credits and low interest rates are keeping the real estate recovery on track. The S&P/Case-Shiller home-price index advanced 2.9% during the second quarter. Prospective buyers and real estate investors are betting the U.S. real estate market has hit its low. Encouraging data boosted two exchange traded funds that invest in homebuyers. The iShares Dow Jones U.S. Home Construction Index Fund ( ITB) and the SPDR S&P Homebuilders ETF ( XHB) were among the 10 best performing real estate funds, rising 7.2% and 6.8%, respectively. The iShares ETF's top performing holding is Ethan Allen Interiors ( ETH), which has gained 19% on cost cutting measures. Insulation giant Owens Corning ( OC) added 9% on the strength of its roofing division and its pledge to cut spending. Homebuilders also had a strong week, with M/I Homes ( MHO) up 13%, Standard Pacific ( SPF) up 12%, D.R. Horton ( DHI) up 11%, and Lennar ( LEN) up 9%.