Even with headwinds, home builder stocks are ‘ludicrously cheap,’ these analysts say

Mark Elias/Bloomberg
Construction workers set floor trusses in place that will support the second story of a home at a development in Doral, Florida.

In a rocky October for stocks, few companies have fared worse than those in the housing sector. Buffeted by a string of reports showing falling home sales and dwindling new construction, the SPDR S&P Homebuilders Index XHB, -1.67% has fallen roughly 12.5% month-to-date, and 24% on the year.

These data have caused some analysts to downgrade the sector, but several others see a perfect buying opportunity.

Housing bears have plenty to point to, as a combination of rising interest rates, a dearth of buildable land, and rising input costs have kept a lid on new-home construction, existing home sales, and the sort of consumer spending that results when families change homes.

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