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Best Stocks & ETFs to Profit from the Red-Hot Housing Market

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  • (0:45) - The Housing Mania of 2020: What Is Causing The Surging Demand?
  • (6:25) - What Are The Current Trends In The Housing Market?
  • (15:50) - Are There Any Signs of A Bubble?
  • (20:30) - Stocks & ETFs To Keep On Your Radar
  • (28:40) - Home Furnishing Stocks: Herman Miller & American Woodmark
  • (36:40) - Episode Roundup: Podcast@Zacks.com

In this episode of ETF Spotlight, I speak with Zacks Senior Equity Strategist, Tracey Ryniec, about the housing market, which has been booming during the pandemic.

Migration from urban centers to suburbs and record low mortgage rates are the main reasons for the surge in housing demand. People are fleeing expensive cities for the suburbs. Further, housing inventory is at historical lows.

Investors could consider homebuilding stocks or ETFs to profit from this boom. Lennar (LEN - Free Report) and Toll Brothers (TOL - Free Report) are both Zacks Rank #1 (Strong Buy) stocks. In fact, earnings estimates are rising for the entire industry and most stocks currently have Zacks Rank #1 (Strong Buy) or #2 (Buy) rankings.

As many companies have announced flexible work policies that will continue even after this pandemic is over, people are spending more to make their homes nicer and more comfortable. Home improvement and related stocks are also surging in this environment. Take a look at Herman Miller and American Woodmark (AMWD - Free Report) .

The most popular homebuilder ETF--the iShares U.S. Home Construction ETF (ITB - Free Report) --is a market cap weighted ETF of home construction and related stocks. It is top heavy with four holdings--D.R. Horton (DHI - Free Report) , Lennar, NVR (NVR - Free Report) and PulteGroup (PHM - Free Report) --accounting for about 45% of the portfolio. Homebuilders get about 65% weighting in the portfolio.

The SPDR S&P Homebuilders ETF (XHB - Free Report) is an equal-weighted ETF that has significant exposure to building-products and home-furnishing companies as well in addition to homebuilders. Whirlpool (WHR - Free Report) and Masco MAS are among its top holdings.

Tune into the podcast to learn more about these stocks and ETFs. Make sure to be on the lookout for the next edition of ETF Spotlight! If you have any comments or questions, please email podcast@zacks.com.

(In full disclosure, Neena owns shares of XHB in the ETF Investor Portfolio.)

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