Posted by As usual, I invested in the housing market rebound too early it seems. I bought 100 shares of the iShares U.S. Home Construction ETF (ITB) last week. Today, the price is down 2.3%. I also have 100 shares of Fidelity National Financial (FNF) which has dropped 11.88% since late February. With the new Fed chairman, I was anticipating a few rate cuts in 2026. But, with the Iran conflict driving inflation higher, it doesn’t look like we are going to get a rate cut any time soon. That’s too bad, because we need more affordable homes in the US. I don’t like watching the value of my “housing rebound” investments falling either.
I like ITB because it has a nice mix of home builders and large retail construction supply companies. The dividend is 1.18% and the P/E ratio is 14.41. The 52-week low is $87.02 and as I write this, the price is $88.45. We first need to have an agreement with Iran so that the flow of oil is not being restricted. Unfortunately, until that happens, inflation is going to divert spending away from housing and home improvement. Automotive is another area that is due for a rebound. My two vehicles are 16 and 19 years old. I don’t drive as much as I used too, but if my vehicles are that old, it is an indicator that others may also be in need of a ride update.
We are now spending over $400 per month for groceries. That is for just two people. The only meat we buy is chicken and pork. Probably won’t be using the gas grill this year (cost of propane). Even though we shop for discounted items, it doesn’t seem to be keeping up with inflation. I used to limit my monthly credit card purchases to $500. Then that changed to $600 and this past month the amount spent was over $700. I expect that to just keep creeping higher in the future. Total monthly budget is around $1300, which is about what I’m getting in dividends in my taxable account. So, there are very few opportunities to add to investments when you keep spending all of your dividends. The catch is that it is difficult to sell an income producing investment because I need the dividends to pay my bills.