XHB SPDR S&P Homebuilders ETF

Q: How does the right and yourself expect us to start families young when the average price of a home in America costs more than $415,000 which feels out of reach for us. A: VP JD Vance: I think the premise of your question is, Republicans, I would say everybody, but certainly my side included, that we don't pay enough attention to the affordability problem that are affecting young people. I would say that you are absolutely right, most Republicans don't but I think I'm the exception...This is going to be a litlle bit of a complicated b/c we have to take stock of the fact that the reason why housing exploded in the US is in part b/c we allowed 20M illegal aliens into our country to buy homes that ought by right go to American citizens Really...really... Top 5 causes of US housing affordability crisis (est'd relative contributions totaling 100%; % are reasoned synthesis, not precise measured shares): 1) Chronic Undersupply from Zoning, Land-Use Regulations, & NIMBYism: 40% - Evidence: Building permits per capita sit roughly 35% below historical norms (St. Louis Fed); local regulatory compliance adds ~24%–26% to the cost of constructing a new single-family home (NAHB); Wharton Land Use Index consistently correlates stricter zoning rules w/significantly higher median home prices. - Core Logic: The primary structural baseline that artificially restricts homebuilding & amplifies all other demand shocks. 2) Surging Mortgage Rates & Loss of Affordability: 25% - Evidence: Benchmark mortgage rates rising to 6%–7%+ made debt service the single largest driver of monthly housing cost increases (Oxford Economics); average monthly mortgage payments roughly doubled b/n 2020 and 2024. - Core Logic: Rapid monetary tightening drastically reduced purchasing power & doubled the long-term cost of borrowing. 3) Elevated Construction Costs (Labor, Materials, & Supply Chains): 15% - Evidence: Acute post-2008 skilled construction labor shortages; sustained post-pandemic materials inflation (tariffs, supply bottlenecks, shipping costs); builder margins compressed on starter homes. - Core Logic: Higher replacement costs establish a higher price floor for newly constructed housing units. 4) Rate Lock-In Effect, Institutional Investors, & Tax/Insurance Cost Hikes: 10% - Evidence: Existing homeowners locked into 3% mortgages refuse to sell, removing millions of starter homes from the market; property insurance premiums & real estate taxes jumped substantially nationwide. - Core Logic: A direct chokehold on inventory that drives up purchase prices for remaining listings. 5) Demographic Shifts & Rental Market Spillover (Including Immigration): 5% - Evidence: Unauthorized immigrants overwhelmingly enter the rental market rather than purchasing homes due to legal & financial constraints (credit/mortgage access). While population growth & smaller household sizes (~2.5 persons/home) increase total shelter demand, Fed research shows that unauthorized immigration primarily spills into rental prices & high-inflow metro rents rather than direct home purchase sales. Furthermore, immigrants represent a major labor source in residential construction. - Core Logic: Direct home purchases by unauthorized immigrants are functionally negligible in the single-family buyer market (<1% of single family buyers); any price pressure is indirect via rental market demand. The claim that undocumented immigrants are buying up homes en masse & causing the single-family home price explosion is unsupported by empirical data & complete bullshit. The supply of usable land for residential homebuilding is falling—or more precisely, it is severely constrained—and this is a core economic driver behind US housing scarcity. $XHB $ITB $XLF

And sharply falling 10Y yield is also boosting housing ($XHB) utilities ($XLU) and regional banks ($DPST) but also some big banks ($FAS) $BAC

$XHB gone are the days of Spanish Mansion construction. gone are the days of full log wall construction gone are the days of brick wall construction just textured dry wall n vinyl windows that is bullish for housing!! 😅. low cost, high margins