Could Interest in Homebuilding Stocks Be Returning? Bulls Making the Case Today...

Homebuilders are among one of the best performing sectors today as we have several news items which suggest that a bullish sentiment could be returning to the market. The SPDR S&P Homebuilders ETF (NYSE: XHB) is up more than 2.7% today.

• following DR Horton's (NYSE: DHI) surprise Q1 profit last week, traders may be trying to get ahead of any possible earnings upside within the group. DR Horton's results marked the first time a homebuilder has returned to a profit since the beginning of the housing debacle.
  
• in an upgrade of Home Depot (NYSE: HD) this morning, Morgan Stanley predicted that the housing market bottom is now in. Although the firm did not comment on any specific homebuilders, Home Depot and homebuilding certainly go hand-in-hand.
  
• FBR Research issued a note this morning considering market data which suggests that lumber price increases are accelerating. While such data may seem bearish at first glance (higher prices = higher costs and slimmer margins), traders may be viewing the metric as a signal that demand for construction goods is beginning to strengthen.

Around the sector:

• Pulte Homes (NYSE: PHM) up 3.9% to $11.30
  
• DR Horton up 3.4% to $13.10
  
• Toll (NYSE: TOL) up 2.4% to $19.09
  
• Lennar (NYSE: LEN) up 6.3% to $15.64
  
• KB Home (NYSE: KBH) up 4% to $15.52
  
• Ryland (NYSE: RYL) up 3.3% to $22.89
  
• Meritage Homes (NYSE: MTH) up 4% To $21.96
  
• Standard Pacific (NYSE: SPF) up 6% to $3.86

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