For investors seeking momentum, SPDR S&P Homebuilders ETF (XHB Quick QuoteXHB - Free Report) is probably on radar. The fund just hit a 52-week high and is up 50.2% from its 52-week low price of $51.54/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:

XHB in Focus

The underlying S&P Homebuilders Select Industry Index represents the homebuilding sub-industry portion of the S&P Total Markets Index. The S&P TMI tracks all the US common stocks listed on the NYSE, AMEX, NASDAQ National Market and NASDAQ Small Cap exchanges. The Homebuilders Index is a modified equal weight index. The fund charges 35 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 a less-hawkish Fed in future should also bode well for the sector.

More Gains Ahead?

The fund has a positive weighted alpha of 40.60. So, there is a decent outlook ahead for those who want to ride this surging ETF a shade further.