As you can clearly see from the chart above, the housing sector ($XHB) and the S&P 500 moved in lock step in 2017. In May 2018, we started to see a slight divergence between the two only to see both drastically diverge during the summer months. Since the highs in early 2018, we have seen $XHB lose over 50% of its 2017 gains. Housing stocks are getting clobbered due to forward indicators such as mortgage rates rising, and applications and inventory to sales ratios declining. Many parts of the US have become overpriced and unaffordable to the majority. As mortgage rates rise, fewer and fewer people will be able to afford home ownership. With housing being 15% of US GDP, it's something to keep your eye on this year.