HOMZ ETF

Homebuilder ETFs have been experiencing strong growth lately due to positive data, decreasing mortgage rates, and cuts in the Federal Reserve's interest rates.

The increasing uncertainty in the U.S. housing market, driven by President Trump's economic plans, makes these ETFs less appealing.

September interest rate cut by the Fed and expectations of further fall in 30-year mortgage rate paints an optimistic picture for the housing market, making investing in housing ETFs appealing.

Expectations that the Fed will start cutting interest rates at its next meeting in September have buoyed the housing market in recent weeks.

Increasing market expectations of a 100 bps interest rate cut by the end of 2024 has resulted in the 30-year mortgage rate plunging to its lowest level in over a year. Look into housing ETFs to capitalize on the optimistic trend of the 30-year mortgage rate.

With increasing expectations of an interest rate cut in September, the future for mortgage rates and the housing market turn optimistic. Look into ETFs to capitalize.

Shares of RH (formerly known as Restoration Hardware), a prominent luxury furniture retailer, seem to be very volatile over the past year and are down 27.7% during the period. In contrast, Hoya Capital Housing ETF HOMZ has gained 3.7% in the same period, which has 20% exposure in the home improvement and furnishings segment.

Retail investors should consider REITs in their portfolios for diversification and income streams. Hoya Capital created REIT ETFs in response to subscriber demand for higher yielding products.

Although still elevated, the 30-year mortgage rate is on a downward trend, with favorable projections painting an optimistic picture for the housing market. Look into ETFs to capitalize.