This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Stocks Leading the Way in the Housing Recovery (Update1)

(Story updated to add that the pace of U.S. homebuilding in February disappointed many in the industry, falling 1.1% from January.)

BOSTON ( TheStreet) -- The much-anticipated rebound in the new-home market may be here with this spring's selling season. And that has investors diving into these highly cyclical stocks after years of decline.

Indicative of that, the S&P 1500 Homebuilder Index is up 35% this year, versus the S&P 500's 11.7% gain.

And that jump has come just months after the close of a year in which only 304,000 new homes were sold, the lowest on record that go back to 1963, according to the Commerce Department.

But today it was reported that the pace of U.S. home building fell in February, by 1.1% from January, well below expectations, which called for an increase of 1.3%, according to the Commerce Department. But there are signs of growth ahead, as permits for new construction reached their highest levels since 2008.

The tenuousness of a potential rebound came through in a report Monday from the National Association of Home Builders as its measure of confidence of new-home builders remained unchanged in March from February despite a number of economic positives in the past few weeks. But the current level is the highest since June 2007 and over 50 builders reported "good" market conditions, which hasn't been the case since April 2006.

Still, buyers are skittish as any form of bad economic news is likely to scare them off. And many markets remain clogged with unprocessed foreclosures, and the new borrowing standards are tough, especially for first-time buyers. Those issues are somewhat offset by low interest rates.

S&P Capital IQ analysts said in a recent research note that "most publicly traded builders are in a stable, competitive position after reducing costs, retiring debt and increasing cash positions. However, we think the housing market will improve slowly in the next year as it will take time before buyers' confidence and the job market progress enough to support a more favorable view of home ownership."

Here are 10 stocks expected to benefit from the homebuilding industry's rebound in inverse order of analysts' "buy" ratings:
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
DHI $29.99 0.00%
LEN $44.72 0.00%
KBH $13.39 0.00%
PHM $18.20 0.00%
TOL $26.94 0.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs