Still, Barry Ritholtz at the Big Picture blog warns investors not to confuse homebuilder stock prices with home prices.
“The elements that drive their stock prices are very different than what drives home prices,” he wrote.
The builders have written down overpriced land purchases and soured mortgages, while moving aggressively into the hot multifamily and rental markets, Ritholtz said.
“We saw the same erroneous logic during the initial phase of the [real estate]crash, from 2006-09 — every uptick in Homebuilder was met with a cheer from the Housing turnaround crew. They were wrong then, and they are most likely wrong now,” he wrote.
SPDR S&P Homebuilders
