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- Homebuilder ETFs are enjoying a strong 2023, defying conventional stock market wisdom.
- The largest homebuilder ETF, the iShares U.S. Home Construction, has risen 46% year-to-date.
- High interest rates usually stifle demand for new homes, but not this year: the housing market is holding firm.
Exchange-traded funds investing in homebuilders are on a roll this year, enjoying record returns despite challenging market conditions.
That defies conventional market wisdom that developers and related investments come under pressure in an environment of rising interest rates, which tend to reduce demand for housing. This time around, however, demand for newly built houses has picked up due to a slump in the supply of existing ones.