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Author Message   Entrepreneur Kurra Bewarse Username: Entrepreneur Post Number: 3934 Registered: 05-2011 Posted From: 24.164.46.35 Rating: N/A Votes: 0 Posted on Wednesday, January 19, 2022 - 4:20 pm:    Housing starts up, but homebuilding stocks down (76.81 +0.18) The SPDR S&P Homebuilders ETF (XHB 76.81, +0.18, +0.2%) is a bit of a misnomer, because it isn't a pure-play ETF for homebuilders. To wit, its largest holding is Floor & Decor Holdings (FND 104.68, +1.57, +1.5%). Carrier Global (CARR 49.82, +0.17, +0.3%), Johnson Controls (JCI 74.52, -0.22, -0.3%), Home Depot (HD 364.68, -2.04, -0.6%), and Lowe's (LOW 238.26, -0.15, -0.1%) are also among the top 10 holdings. In fact, only three of the top 10 holdings are actual homebuilding stocks: Lennar Corp. (LEN 100.56, -0.75, -0.7%), NVR, Inc. (NVR 5490.12, -6.71, -0.1%), and D.R. Horton (DHI 92.61, -0.78, -0.8%). The XHB is up today, but the homebuilders themselves are down. The catalysts for their underperformance include: KeyBanc downgrading D.R. Horton (DHI 92.61, -0.78, -0.8%) to Sector Weight from Underweight and Lennar (LEN 100.56, -0.75, -0.7%), KB Home (KBH 44.41, -0.79, -1.8%), and Toll Brothers (TOL 61.86, -1.49, -2.4%) to Underweight from Sector Weight. Misgivings about a slowdown in demand due to higher costs for buyers, which are stemming from higher material costs for builders and rising mortgage rates. A recognition that the increase in December housing starts (+1.4%) was driven by multi-unit dwellings. Single-unit starts were down 2.3% month-over-month.