Mortgage rates have sunk to their lowest point in almost a year, prompting the question of how long the trend will continue, and whether housing and mortgage finance-linked ETFs might reap the benefits.
The iShares U.S. Home Construction ETF (BATS:ITB) and SPDR S&P Homebuilders ETF (NYSE:XHB) are usually considered to be straight plays on housing affordability. Both monitor top-shelf U.S. builders like D.R. Horton Inc (NYSE:DHI), Lennar Corp (NYSE:LEN), and PulteGroup Inc (NYSE:PHM), firms whose revenue can turn meaningfully on the basis of borrowing costs. If lower mortgages lure buyers into the market, homebuilder ETFs can exhibit increased momentum.
