An unexpected jump in existing home sales caused homebuilder stocks to jump on Friday and lifted hopes for an economic recovery.

XHB

(click to load)

Sales of existing homes increased 7.2% in July from June according to the National Association of Realtors.  The jump marks the first time in five years that existing home sales have increased four months in a row.  The monthly sales gain was also the largest on record since the association began recording the statistic in 1999.

The SPDR S&P Homebuilder ETF (XHB) rose 3.8% on Friday’s news.  XHB is an equal-weighted index of homebuilders such as Lennar andPulte and home related manufacturers and retailers including LowesHome Depot and Sherwin Williams.

The iShares Dow Jones U.S. Home Construction Index Fund (ITB) was also up 3.8% on Friday.  ITB invests in companies that are predominately in home construction with top holdings including PulteDR Horton andNVR.

For more ETF investing choices, see the ETF Directory for a complete list of industry ETFs.