The combination of extremely low interest rates and the trend to move to more open spaces due to the virus scare has triggered an unexpected boom for real estate stocks. The National Association of Realtors just reported that sales of new and existing homes in the U.S. hit their highest levels since the housing bubble in 2006 and 2007. Existing home sales were up 10.5% year over year in August, while new home sales were up a whopping 43.2% in the same period. At this rate, unsold housing inventory stands at three months of supply, which is right around a 20-year low.
Therefore, here are 3 top housing investments that could make good money:
1. SPDR S&P Homebuilders ETF (NYSE: XHB)
With XHB you invest in a diversified basket of everything homebuilder-related. These are its top 10 holdings:
Whirlpool 4.61%, Carrier 4.39%, Fortune Brands 4.22%, Trex 4.20%, D.R. Horton 4.19%, PulteGroup 4.17%, NVR 4.15%, Trane 4.15%, Lowe’s 4.14%, Lennox 4.06%.
2. Redfin (Nasdaq: RDFN)
Absent in the basket of SPDR S&P Homebuilders ETF holdings are any real estate brokers. Redfin seems to be a very interesting investment to have exposure to this sector. It’s the most comprehensive online real estate broker, which provides title and settlement services to buy and sell your home.
3. Social Capital Hedosophia Holdings (NYSE: IPOB)
Social Capital Hedosophia Holdings is the newest project from Social Capital founder Chamath Palihapitiya, who took Virgin Galactic public by way of a special purpose acquisition company (SPAC). Now it’s doing the same with Opendoor, which has reinvented how people buy and sell a home with a digital, on-demand experience. This is the most speculative of the three plays.
Sven Franssen