U.S. homebuilder stocks and exchange traded funds have posted substantial gains after hitting lows late last year. Recent housing data, positive earnings reports and easing unemployment are all supporting the upbeat sentiment.

Investors in the sector closely watch the new home sales reports from the U.S. Commerce Department.Last week’s report was the best reading in over four years, reports Scott Pluschau for ETF Digest. [Housing ETFs Build Gains but Analysts Skeptical]

Recent data on home construction and pending home sales have been positive. The chief executives of some of the nation’s largest homebuilding companies have remarked that they feel the building market has stabilized, reports Columbia Tribune.

“Looking ahead we are growing more optimistic on U.S. housing as the market appears to be at the end of stabilization and is starting to lay the groundwork for a firm recovery.The combination of record-low interest rates and comparatively low home prices has seems to finally be getting buyers to move forward with new purchases,” Valuentum Securities said on Seeking Alpha. [Homebuilder ETFs Rally 3% on Pending Home Sales]

Lennar’s (NYSE: LEN) fourth quarter earnings got the homebuilder sector off to a good start in 2012. Margins were improved and revenue was reported up 11% for the year. The company is the country’s second largest homebuilder by market value.

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