SPDR S&P Homebuilders ETF (XHB): How to Buy

By Tony Dong – Updated Oct 20, 2025 at 2:12 PM | Fact-checked by Frank Bass

Key Points

XHB ETF follows the S&P Homebuilders Index, enabling investment in the U.S. housing market.
XHB's performance is affected by interest rates, consumer confidence, and construction costs.
The ETF uses equal weighting to manage investments, offering a rebalanced, diverse portfolio.

Some sector-specific exchange-traded funds (ETFs) can be especially cyclical, and the SPDR S&P Homebuilders ETF (XHB +0.01%) is a good example.

The fund invests in companies tied to the housing and home improvement ecosystem, giving investors a way to participate in the ups and downs of the U.S. housing market.

Because this sector is influenced by interest rates, consumer confidence, and construction costs, the ETF’s performance can swing widely with market cycles.

While it seems simple on the surface, these traits make this ETF a risky choice for beginner investors.

NYSEMKT: XHB

SPDR Series Trust - SPDR S&P Homebuilders ETF

Today's Change

(0.01%) $0.01

Current Price

$106.16

Key Data Points

Market Cap

$0B

Day's Range

$105.92 - $107.38

52wk Range

$84.48 - $126.09

Volume

818K

Avg Vol

Gross Margin

0.00%

Dividend Yield

N/A

What is the SPDR S&P Homebuilders ETF?

This ETF passively tracks the S&P® Homebuilders Select Industry® Index, which selects stocks from the broader S&P Total Market Index across several housing-related subsectors:

Building products: manufacturers of construction materials and equipment.
Home furnishings: companies selling furniture and interior décor.
Home improvement retail: big-box chains selling renovation supplies.
Home furnishing retail: specialty retailers focused on household goods.
Household appliances: producers of major and small home appliances.

Like most passive ETFs, this fund’s goal is not to beat the benchmark but to replicate its performance. Because it’s rules-based, objective, and transparent, investors always know what they’re getting.

Exchange-Traded Fund (ETF)

An exchange-traded fund, or ETF, allows investors to buy many stocks or bonds at once.

How to buy the SPDR S&P Homebuilders ETF

Open your brokerage account: Log in to your brokerage account where you handle your investments.
Search for the ETF: Enter the fund’s name or ticker into the search bar to bring up the ETF’s trading page.
Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this ETF.
Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you’re willing to pay.
Submit your order: Confirm the details and submit your buy order.
Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly.

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Should I invest in the SPDR S&P Homebuilders ETF?

This ETF could appeal to investors who believe housing starts will rebound, that interest-rate cuts will reignite demand, or that U.S. homebuilding stocks remain undervalued.

Compared with market-cap-weighted peers, this fund offers broader diversification across suppliers, retailers, and appliance makers, and not just the builders themselves.

However, this also means the ETF’s exposure to true home construction firms is smaller than its name suggests. Investors seeking a purer play on homebuilders might prefer alternatives with heavier weighting in those companies.

Because of its narrow focus and cyclical risk, the ETF is best used as a satellite position, meaning a smaller tactical addition around a diversified core portfolio of broader stock or bond ETFs.

Does the SPDR S&P Homebuilders ETF pay a dividend?

Yes. The ETF has a 30-day SEC yield of 0.55%, paid quarterly. The relatively low dividend yield reflects the growth-oriented nature of its holdings, many of which reinvest profits rather than paying large dividends.

What is the SPDR S&P Homebuilders ETF’s expense ratio?

The expense ratio is the annual cost investors pay to cover the fund’s management and operations. This ETF charges 0.35%, or about $35 per $10,000 invested, a reasonable rate for a sector ETF.

Expense Ratio

A percentage of mutual fund or ETF assets deducted annually to cover management, operational, and administrative costs.

Historical performance of SPDR S&P Homebuilders ETF

Annualized Total Returns as of Sept. 30, 2025
	1 Year	3 Year	5 Year	10 Year
Net Asset Value	-10.38%	27.53%	16.43%	13.41%
Market Price	-10.35%	27.50%	16.43%	13.42%

The bottom line

This ETF offers a balanced way to capture the full homebuilding supply chain, from builders and materials producers to retailers and appliance makers. It’s a transparent, rules-based approach with an equal-weight design that keeps any single stock from dominating the portfolio.

However, before investing, consider why you’d choose this ETF over a market-cap weighted competitor. Some investors may prefer its broader mix and equal weighting, while others might want more concentrated exposure to the builders themselves.

Either way, it’s best viewed as a satellite holding for long-term investors who understand the risks and cycles of the housing market.

FAQ

Tony Dong has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Drainage Systems, Johnson Controls International, TopBuild, and Williams-Sonoma. The Motley Fool has a disclosure policy.