Mortgage applications have dropped this week to their lowest level in 22 years. With rates up to around 5.5% from 3% last year, they are negating refinancing. That tied in with increased home prices and a lack of inventory don’t sit well with these two ETFs. The iShares US Home Construction ETF (ITB) and the SPDR S&P Homebuilders ETF (XHB) are both down around -27% YTD.
This may be a sign that the housing market is starting to cool off a bit.