Higher Interest Rates Pound Home Builders Into Bearish Territory

The Housing Market Index (HMI) for May increased to 70and is just 4 points off its post-recession high set last December. Just don’t tell investors home builders are as confident as ever despite rising rates. Today, the yield on the 10-year U.S. Treasury bond soared to its highest level in 7 yearsand settled at 3.

07%. The iShares 20+ Year Treasury Bond ETF (TLT) dropped 1.1%. The iShares US Home Construction ETF (ITB) followed suit with a now familiar correlation and a whopping 3.8% loss. The fresh 7-month low firmly placed the builders index into bearish territory with a confirmed 200-day moving average (DMA) breakdown.