For investors looking for momentum, SPDR S&P Homebuilders ETF (XHB Quick QuoteXHB - Free Report) is probably a suitable pick. The fund just hit a 52-week high and is up 54.2% from its 52-week low price of $56.15/share.

Let’s take a look at the fund and its near-term outlook to gain an insight into where it might be headed.

XHB in Focus

SPDR S&P Homebuilders ETF seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the S&P Homebuilders Select Industry Index. XHB has AUM of $2.31 billion and charges an expense ratio of 35 basis points, as stated in the prospectus.

Why the Move?

Though the Fed has turned hawkish, mortgage rates are still near historic lows that are encouraging people to buy more homes, making refinance cheaper. This, in turn, has led to accelerating demand for new homes. U.S. existing home sales in October rose to the highest level in nine months. Homebuilder confidence is also rising, with single-family homes increasing more than expected in November, to the highest level since last May. Lack of resale inventory, combined with strong consumer demand, continues to support single-family homebuilding. This is making funds like XHB an impressive investment option.

More Gains Ahead?

It seems like the fund will remain strong, with a positive weighted alpha of 48.79, which gives cues of a further rally.