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It looks like American International Group (AIG) is considering moving back into the home loan business again. And I remember seeing an article last week about Goldman Sachs (GS) raising money for an investment fund that would gain exposure to home loans and the "housing recovery." Couple that with a Barron's magazine cover titled "Home Prices Ready to Rebound," and I'm definitely seeing a few anecdotal signs of positive sentiment toward the housing sector.
Whenever you see anecdotal sentiment indicators like this, you also want to look at the quantitative sentiment. What people are actually doing with their money can be even more important than what you are seeing and hearing in the news and media. The biggest thing that stands out to me is short interest. A lot of the housing names have between 10% and 20% of their float sold short. In addition, analysts are not overly bullish on the sector. Option activity is mixed; it's hard to get a gauge on it right now.
Given the industry's incredibly strong price action and the continued quantitative skepticism, I can't call a top on these names just yet. We have seen some of these builders start to slow down and consolidate, but that is natural during an uptrend. The recent anecdotal optimism is something to keep an eye on -- but after viewing the entire technical and sentiment landscape, it looks like the homebuilders may not be done just yet.