iShares U.S. Home Construction ETF [ITB] Stock Forecast

Ken Zener, homebuilder analyst at KeyBanc, joins 'Squawk on the Street' to discuss whether it's a good time to invest in homebuilder stocks and more.

Increased interest rates not expected to jolt potential homebuyers.

Fast-rising mortgage rates caused homebuilder sentiment to drop further into negative territory in September, and builders lowered prices.

Inflation in the United States was higher-than-expected, indicating the Federal Reserve to likely remain aggressive in its monetary tightening campaign to restore price stability.

CNBC's Diana Olick joins 'Squawk on the Street' to report on the recent Goldman Sachs report detailing housing market expectations, the likelihood of significant declines in home prices, and the potential for a housing recession.

Sector ETF report for ITB

While the frenetic housing market is showing signs of cooling down, homebuilder sector-related exchange traded funds may return to reflect a more normal path of growth, following a period of consolidation. Year-to-date, the iShares U.S. Home Construction ETF (ITB) decreased 25.0%, SPDR S&P Homebuilders ETF (XHB) declined 22.

The National Association of Home Builders/Wells Fargo Housing Market Index declined 6 points in August to 49. Also, U.S. homebuilding declined to the lowest level in nearly one and a half years in July.

The pandemic-era housing market could very well go down in history as one of the biggest housing bubbles ever. A perfect storm of mass psychology and misguided government policies drove prices up to the stratosphere.

Wall Street logged the best month since November 2020 in July. These are the winning ETFs.