The SPDR S&P Homebuilders ETF (XHB) fell nearly 1% last week amid fears that Amazon.com Inc. (AMZN) could encroach upon the home appliance market currently dominated by the likes of Dow component Home Depot (HD) and Lowe’s Companies Inc. (LOW).

Some market observers believe investors should not rush to part ways with homebuilders stocks and ETFs even amid competitive threats on the retail side of the home furnishings business.

XHB’s well-known rival is the iShares U.S. Home Construction ETF (ITB) . The equal-weight XHB mixes stocks such as Tempur Sealy (TPX), Williams-Sonoma (WSM) and Restoration Hardware (RH) with pure play homebuilders such as Lennar (LEN) and Toll Brothers (NYSE:TOLL) among others.

ITB tracks the Dow Jones U.S. Select Home Construction Index while XHB follows the S&P Homebuilders Select Industry Index.

“Matt Maley, equity strategist at Miller Tabak, is watching homebuilder stocks closely following Wednesday’s U.S. housing starts data, showing that housing starts rose 8.3 percent to a seasonally adjusted annual rate of 1.22 million units, versus 1.16 million units expected,” reports CNBC .

Related: ETFs on TV and in the Financial Media

ITB is up almost 24% year-to-date while XHB is higher by 13.6%. Housing industry experts also argue that higher rates reflect an improving economy and wage growth, which could also help the housing market in the long run. Still, some market observers are worried that the rising mortgage rates could dissuade borrowers to move into new homes.

“The group took a hit on Thursday after Sears announced it would sell Alexa-enabled appliances on Amazon. Shares of some retail names like Home Depot and Lowe’s fell sharply on Thursday following the announcement,” according to CNBC.

Housing data points remain solid.

“Home builders are putting up more houses to meet strong demand across the country. Builders started 1.215 million homes annually through June in the U.S., according to a U.S. Commerce Department report Wednesday. The amount, which is seasonally adjusted, represents an 8.3 percent gain from the previous month and a 2.1 percent rise over the June 2016 starts,” reports the Houston Chronicle .

Related: 3 Strategic Reasons Advisors Should Adopt Factor-Based ETFs

Traders looking for a bearish play on homebuilders stocks can consider the Direxion Daily Homebuilders & Supplies 3x Bear Shares (CLAW) , which attempts to deliver triple the daily performance of the index XHB tracks.

For more information on the housing sector, visit our homebuilders category .

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.

Click to read more at ETFtrends.com.