Mortgage demand wilts as rates approach one-year high
XHB•Housing stocks start to catch up
Housing stocks, on the other hand, reflect where investors expect the sector to be six months to a year in the future.
With that in mind, investors' view of the sector is starting to improve.
Both the S&P 1500 Homebuilding Index .SPCOMHOME and the PHLX Housing Sector Index .HGX handily outperformed the broader market in the first two months of the year, but that advantage evaporated in March when the U.S.-Israeli war on Iran pushed interest rates higher, taking mortgage rates with them.
While the indexes have largely underperformed the broader market since then, over the last week they look to be playing catch-up.
So far this year, the SPCOMHOME and the HGX are now up 2.8% and 5.8%, respectively, compared with the S&P 500's .SPX 8.5% year-to-date advance.
(Stephen Culp)
