What are homebuilder ETFs?
Homebuilder ETFs own companies that build new homes, along with firms tied to building and improving them. Three funds make up this group, and they share a common core. All three hold the builders D.R. Horton, PulteGroup, Toll Brothers and Meritage Homes, plus Lennox International, Masco, Owens Corning and Installed Building Products. Two of the three also hold Lennar, NVR, Sherwin-Williams and The Home Depot. D.R. Horton carries the most weight, at a median of about 12.4% of assets across the three funds.
ITB and XHB are index funds. An index fund follows a rules-based list of stocks instead of a manager's picks. ITB, from iShares, tracks an index of U.S. home construction stocks and is concentrated: its 10 largest holdings make up about 64% of the fund, led by D.R. Horton at 15.7%. XHB, from State Street's SPDR brand, tracks an index drawn from the homebuilding segment of a broad U.S. market index. It is more spread out: its top 10 are about 36% of assets, and its largest holding, Owens Corning, is 4.1%.
NAIL, from Direxion, is a leveraged fund. It aims to deliver 300% of its index's daily return, before fees, and resets every trading day. Over longer periods, its results can differ sharply from three times the index. Its largest holdings, led by D.R. Horton, PulteGroup and Lennar, resemble ITB's.
The expense ratio is the yearly fee, charged as a percentage of assets. XHB charges 0.35% and ITB 0.37%, which is also the group's median. NAIL charges the most, at 0.96%. With only three funds in the group, all of its roughly $4.8 billion sits in them. ITB is the largest at about $2.6 billion, followed by XHB at about $1.6 billion and NAIL at about $532 million.
Homebuilder ETF holdings: the stocks most funds own
The stocks that show up most often among the largest positions of the 3 biggest homebuilder ETFs with holdings reports, from their latest N-PORT filings.
| Stock | Funds holding it | Typical weight |
|---|---|---|
| D.r. Horton, Inc. | 3 of 3 | 12.38% |
| Pultegroup, Inc. | 3 of 3 | 7.9% |
| Toll Brothers, Inc. | 3 of 3 | 3.99% |
| Lennox International Inc. | 3 of 3 | 3.34% |
| Masco Corporation | 3 of 3 | 3.02% |
| Owens Corning | 3 of 3 | 2.35% |
| Meritage Homes Corporation | 3 of 3 | 2.08% |
| Installed Building Products, Inc. | 3 of 3 | 1.92% |
| Lennar Corporation | 2 of 3 | 5.82% |
| NVR, Inc. | 2 of 3 | 5.44% |
| The Sherwin-williams Company | 2 of 3 | 4.03% |
| The Home Depot, Inc. | 2 of 3 | 3.74% |
Typical weight is the median share of each fund’s assets in the stock, among the funds that hold it in their 25 largest positions.
The largest homebuilder ETFs, side by side
Swipe the table to see all 2 funds.
| ITB | XHB | |
|---|---|---|
| Net assets | $2.60B | $1.63B |
| Expense ratio | 0.37% | 0.35% |
| Holdings | 45 | 35 |
| In the 10 largest | 64.07% | 35.57% |
| Biggest holding | D.r. Horton, Inc. (15.7%) | Owens Corning (4.1%) |
| Yield | 1.39% | 1.19% |
| 1-year return | -12.1% | -7.9% |
| 3 years, a year | +9.2% | +13.4% |
| 5 years, a year | +5.9% | +6.3% |
| Worst drop, past year | -25.7% | -22.7% |
| Launched | 2006 | 2006 |
The largest ordinary funds by net assets (leveraged and inverse funds are listed further down). Holdings from each fund’s latest N-PORT report; returns include reinvested distributions, as of Oct 27, 2026.
Head to head
ITB vs XHB
ITB holds 45 stocks, and its 10 biggest make up about 64% of assets, with D.R. Horton alone at 15.7%. XHB holds 35 stocks; its top 10 are about 36%, and its largest position, Owens Corning, is 4.1%. About 51.7% of their assets overlap, across 25 shared stocks. XHB charges 0.35% a year and ITB 0.37%. As of May 16, 2025, XHB's 1-year price return was -5% against ITB's -11.3%, with a smaller worst drop (-30.5% vs. -33.4%). ITB may suit investors seeking focused exposure to large builders; XHB, those wanting a broader mix.
ITB vs NAIL
These are different tools, not alternatives. ITB tracks its index without leverage. NAIL seeks 300% of its index's daily return, before fees, and resets each trading day. Their top holdings look alike: D.R. Horton leads both, at 15.7% of ITB and 12.4% of NAIL, followed by PulteGroup, Lennar and NVR. NAIL costs 0.96% a year versus ITB's 0.37%. As of May 16, 2025, NAIL's 1-year price return was -51% against ITB's -11.3%, and its worst drop over that year was -74.9% versus -33.4%. ITB may suit long-term holders; NAIL is built around single-day results for active traders.
How much do the largest homebuilder ETFs overlap?
Owning two funds that hold the same stocks adds little diversification. Overlap here is the share of assets two funds have in common: for each stock both own, the smaller of its two weights, added up.
From each fund’s full holdings in its latest N-PORT report.
How have homebuilder ETFs performed?
The five largest ordinary funds: growth from the start of the range, distributions reinvested. The dashed gray line is the S&P 500 (SPY).
How homebuilder ETFs did in past market crashes
| Fund | 2008 crash | 2020 crash | 2022 drop |
|---|---|---|---|
| ITB | -69.4% | -51.6% | -32.9% |
| XHB | not yet launched | not yet launched | -32.1% |
| S&P 500 (SPY) | -55.2% | -33.7% | -24.5% |
Total return from the stock market’s peak to its low in each fall, distributions reinvested.
What drives homebuilder ETFs?
Homebuilders earn money by building and closing on new homes, so their profits rise and fall with housing demand. Mortgage rates are a major driver: when rates climb, monthly payments rise, fewer households can afford a new home, and builders may cut prices or offer incentives that squeeze margins. Land, labor and material costs also shape profits. The suppliers in these funds depend on the same construction activity, plus spending on repairs and remodeling. These stocks are sensitive to interest rates and the economy, so their prices often move on rate expectations before results change.
That sensitivity has shown up in downturns. During the 2008 financial crisis, ITB lost 69.4% and XHB 63.2%, against 55.2% for the S&P 500. In the 2020 COVID crash, ITB fell 51.6% and XHB 49.2%, versus 33.7% for the index. In the 2022 bear market, ITB dropped 32.9% and XHB 32.1%, compared with 24.5% for the S&P 500. XHB, with its broader mix, fell less each time. NAIL seeks to triple daily moves, so its swings run far larger: its worst drop in the year to May 16, 2025, was 74.9%, against 33.4% for ITB.
Homebuilder ETFs with the lowest expense ratios
| # | Fund | Expense ratio | On $10,000 | Net assets |
|---|---|---|---|---|
| 1 | XHB SPDR S&P Homebuilders ETF | 0.35% | $35 a year | $1.63B |
| 2 | ITB iShares U.S. Home Construction ETF | 0.37% | $37 a year | $2.60B |
Ordinary funds with at least $10 million in net assets. The median ordinary homebuilder ETF charges 0.35% a year; leveraged and inverse funds usually charge more.
Do homebuilder ETFs pay dividends?
2 of the 2 ordinary homebuilder ETFs with a page here paid distributions over the last 12 months, with a median yield of 1.19%.
| Highest yields | Yield | Net assets |
|---|---|---|
| ITB iShares U.S. Home Construction ETF | 1.39% | $2.60B |
| XHB SPDR S&P Homebuilders ETF | 1.19% | $1.63B |
Distributions over the last 12 months divided by the price; funds with at least $25 million in net assets.
How to choose a homebuilder ETF
- Costs are close, except for NAIL. XHB charges 0.35% a year and ITB 0.37%, so the two ordinary index funds cost nearly the same. NAIL charges 0.96%, the highest in the group.
- How much rides on a few stocks. ITB's 10 largest holdings make up about 64% of the fund, and D.R. Horton alone is 15.7%. XHB's top 10 are about 36%, and no single stock tops 4.1%. Higher concentration ties results more closely to a few builders.
- Builders alone or builders plus suppliers. ITB's index covers U.S. home construction stocks, and its top five are all builders: D.R. Horton, PulteGroup, Lennar, NVR and Toll Brothers. XHB's top five mix builders such as KB Home with suppliers such as Owens Corning.
- Both track U.S.-only indexes. ITB and XHB both follow indexes of U.S. stocks, so neither adds homebuilders from other countries. Their results stay tied to the U.S. housing market and U.S. mortgage rates.
- Size and history. ITB is the largest at about $2.6 billion, and XHB holds about $1.6 billion. Both launched in 2006, so both have records through the 2008 crisis. NAIL launched in 2015 and holds about $532 million.
- NAIL is a daily 3x trading tool. NAIL seeks 300% of its index's daily return and resets each day, so results over months can stray far from three times the index. As of May 16, 2025, it lost 51% over one year, versus 11.3% for ITB.
What are the risks of homebuilder ETFs?
- A few builders drive results. D.R. Horton is in all three funds at a median weight of about 12.4% and makes up 15.7% of ITB. ITB's top 10 holdings are about 64% of assets, so trouble at one large builder can move the fund.
- Mortgage rates and housing cycles. Builders and suppliers depend on home construction, which tends to slow when mortgage rates rise or the economy weakens. ITB and XHB share 51.7% of their assets by weight, so holding both spreads this risk less than it may appear.
- Large swings within a single year. Volatility measures how widely returns swing. As of May 16, 2025, ITB and XHB had 1-year volatility of 28.6% and 28.5%, and their worst drops over that year were 33.4% and 30.5%.
- Steeper losses than the market in downturns. In the 2008 financial crisis, ITB lost 69.4% and XHB 63.2%, against 55.2% for the S&P 500. In the 2020 COVID crash, ITB fell 51.6% versus 33.7% for the index. Deeper falls need bigger gains to recover.
- Daily leverage in NAIL. NAIL targets 300% of its index's daily move. In choppy markets, daily resetting can leave longer-term results well below three times the index's return. As of May 16, 2025, its 1-year volatility was 85.5%, with a worst drop of 74.9%.
Leveraged and inverse homebuilder ETFs (3x)
These funds aim for a multiple, or the opposite, of one day’s return, and reset every day. Held for longer than a day, their results can drift far from that multiple, especially when prices swing. They are trading tools, not long-term holdings. Why leveraged ETFs decay →
| Fund | Daily aim | Net assets | 1-year return |
|---|---|---|---|
| NAIL Direxion Daily Homebuilders & Supplies Bull 3X Sh… | 3× | $532.2M | -53.2% |
List of all homebuilder ETFs, by size
| # | Fund | Net assets | Cost | Yield | YTD | 1 yr | 5 yr |
|---|---|---|---|---|---|---|---|
| 1 | ITB iShares U.S. Home Construction ETF | $2.60B | 0.37% | 1.39% | -5.1% | -12.1% | +5.9% |
| 2 | XHB SPDR S&P Homebuilders ETF | $1.63B | 0.35% | 1.19% | -2.7% | -7.9% | +6.3% |
| 3 | NAIL Direxion Daily Homebuilders & Supplies Bull 3X Sh… Leveraged | $532.2M | 0.96% | 1.11% | -37.8% | -53.2% | -17.2% |
Questions investors ask about homebuilder ETFs
What is the largest homebuilder ETF?
The iShares U.S. Home Construction ETF (ITB) is the largest homebuilder ETF, with about $2.6 billion in net assets. It launched in 2006, holds 45 stocks and charges 0.37% a year. The SPDR S&P Homebuilders ETF (XHB) is second, with about $1.6 billion. The leveraged Direxion Daily Homebuilders & Supplies Bull 3X Shares (NAIL) holds about $532 million. Together, the three hold about $4.8 billion.
What is the cheapest homebuilder ETF?
XHB is the lowest-cost homebuilder ETF, with an expense ratio of 0.35%. An expense ratio is the yearly fee a fund takes from its assets, shown as a percentage. ITB is close behind at 0.37%, so the gap between the two ordinary funds is small. NAIL, the 3x leveraged fund, charges 0.96%. With fees this close, differences in holdings and concentration may matter more when comparing XHB and ITB.
ITB vs XHB: what is the difference?
ITB is more concentrated in large homebuilders, while XHB spreads its money more evenly across builders and suppliers. ITB's 10 largest holdings make up about 64% of assets, led by D.R. Horton at 15.7%. XHB's top 10 are about 36%, led by Owens Corning at 4.1%. About 51.7% of their assets overlap. XHB charges 0.35% and ITB 0.37%. As of May 16, 2025, XHB's 1-year price return was -5% and ITB's was -11.3%.
Do homebuilder ETFs pay dividends?
Yes. ITB and XHB both pay dividends, though the income is modest. As of May 16, 2025, ITB's yield was about 1.04% and XHB's about 0.76%. A yield is a year of payouts shown as a percentage of the share price. With yields that low, share price moves drive most of these funds' results. NAIL is a leveraged fund built for daily trading, not for income.
Do homebuilder ETFs own Home Depot?
Yes, two of the three homebuilder ETFs hold The Home Depot, at a median weight of about 3.7%. It is not among the five largest holdings of any of them. The biggest shared holding is D.R. Horton, which all three funds own at a median weight of about 12.4% and which makes up 15.7% of ITB. Sherwin-Williams is another familiar name held by two of the three.
How many homebuilder ETFs are there?
This guide covers three homebuilder ETFs: ITB from iShares, XHB from State Street's SPDR brand and NAIL from Direxion. Together they hold about $4.8 billion. ITB and XHB are ordinary index funds tracking U.S. homebuilding stocks. NAIL is a leveraged fund that seeks 300% of its index's daily return. All three share a core of stocks that includes D.R. Horton, PulteGroup and Toll Brothers.
What is NAIL, the 3x leveraged homebuilder ETF?
NAIL is Direxion's leveraged homebuilder fund. It seeks 300% of its index's daily return, before fees, and resets every trading day. Because of that daily reset, results over weeks or months can differ widely from three times the index, which makes NAIL a short-term trading tool. As of May 16, 2025, it lost 51% over one year, versus 11.3% for ITB, and its worst drop over that year was 74.9%. It charges 0.96% a year.
Are homebuilder ETFs riskier than the S&P 500?
Historically, yes. They have fallen further than the S&P 500 in past downturns. In the 2008 financial crisis, ITB lost 69.4% and XHB 63.2%, compared with 55.2% for the S&P 500. In the 2020 COVID crash, they fell 51.6% and 49.2%, versus 33.7%. In the 2022 bear market, ITB dropped 32.9% and XHB 32.1%, against 24.5%. Their dependence on mortgage rates and housing demand helps explain the bigger swings.
Is there a Vanguard, Fidelity or Schwab homebuilder ETF?
No. None of the three offers a homebuilder ETF. The largest homebuilder ETFs come from iShares (ITB) and SPDR (State Street) (XHB), and customers of all three firms can buy other companies’ ETFs in their brokerage accounts. For a broader fund, VFH (Vanguard Financials ETF) and FNCL (Fidelity MSCI Financials Index ETF) are covered in our financials ETF guide.
