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Homebuilding ETF (ITB) Hits New 52-Week High

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For investors seeking momentum, iShares U.S. Home Construction ETF (ITB - Free Report) is probably on radar. The fund just hit a 52-week high and is up 64.6% from its 52-week low price of $48.02/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:

ITB in Focus

The underlying Dow Jones U.S. Select Home Builders Index is a subset of the Dow Jones U.S. Household Goods Index. It is a free-float adjusted market capitalization-weighted index. It measures the performance of the home construction sector of the U.S. equity market. The fund charges 39 basis points in annual fees.

Why the Move?

The homebuilding sector has been improving lately. Homebuilder sentiment has improved considerably. A dearth of existing homes for sale is propelling homebuilders into the limelight despite prevailing market challenges.

This trend, as NAHB’s chief economist Robert Dietz suggests, is likely to persist as potential buyers continue to scout for new construction due to limited available housing inventory, the CNBC article quoted.

New home listing also marked a significant rise from the 12.7% average recorded between 2000-2019. Plus, chances of low-to-no rate hikes by the Fed in future should also bode well for the sector.

More Gains Ahead?

The fund has a positive weighted alpha of 46.40. So, there is a decent outlook ahead for those who want to ride this surging ETF a shade further.

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