Making a case for housing plays

You're probably wondering why housing stocks and why do I like them now.  Let's go through my methodology.

1) With this turn to lower interest rates, the lower rates plays have been showing a ton of relative strength of late.

2) We know the end of the year is typically the strongest period of the year, and the end of strong years are generally strong.  Therefore we could expect risk-on conditions into year end.

3)  Housing is the most offensive of the low rate play groups.  Also, now the price patterns are there for bottoms in the group.  Check out the Philadelphia Housing Index.

On top of all that, Bloomberg had a tidbit from Warren Buffet on housing last week.

“It’s coming back,” Buffett, 83, said yesterday during an event at the New York Public Library. “Pricing (SPCS20Y%) is better in almost all markets by a reasonable percentage from a few years ago. Housing starts are up somewhat. They still are not where I would regard as an equilibrium point, where they match household formation. ”

If you're sold on another leg up in housing, here are some plays that have my interest on a longer term basis.

Other names that could really lead/have led the group include: FNF, USCR, RDN, STCK (recent ipo)