Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Lennar Corporation (LEN), Standard Pacific Corp. (SPF), PulteGroup, Inc. (PHM): Play the Housing Rebound With These 3 Homebuilders

Standard Pacific Corp. (NYSE:SPF) is unique among homebuilders in that their primary market is the move-up market. In other words, their buyers are upgrading to a premier community. Their price range goes up to $1 million and their average selling price in California is $500,000. Standard Pacific Corp. (NYSE:SPF) should continue to perform well as the luxury market is recovering faster than the first-time home buyer market is.

PulteGroup, Inc. (NYSE:PHM)

builds homes in approximately 55 markets in the U.S. The company builds homes under the Centex, Pulte Homes, and Del Webb brands. PulteGroup, Inc. (NYSE:PHM), like Standard Pacific Corp. (NYSE:SPF), had a good first quarter of 2013. Net income for the quarter was $82 million versus a net loss of $12 million in the prior year. According to PulteGroup, Inc. (NYSE:PHM) Chairman, President & CEO Richard J. Dugas:

The stronger demand which the housing industry saw throughout 2012 has carried into the spring selling season of 2013. We experienced higher traffic in our communities with buyers feeling a greater sense of urgency given the combination of limited product inventory and rising prices found in many markets throughout the country.

Home sale revenue for the first quarter was up 35% to $1.1 billion compared to $814 million last year. Closings increased 23% to 3,833 homes and the average sales price increased $26,000 to $287,000. For the quarter, the home sales gross margin was 22.9%. Contract backlog at quarter end was $2.4 billion and represented 7,825 homes.

This was just a great quarter for PulteGroup, Inc. (NYSE:PHM). Revenue came from home sales and not from real estate transactions or land sales. The company was also able to raise home prices. Those are two very bullish signs going forward.

PulteGroup, Inc. (NYSE:PHM) is one of the top builders of active adult communities in the U.S. This segment is one of the fastest-growing segments in housing. As more and more baby boomers retire, look for PulteGroup, Inc. (NYSE:PHM) to benefit.

Foolish assessment

I think all three stocks are great ways to play the housing recovery. Even though all three have performed well over the past year, they are still off their all-time highs last seen in 2005. I think all three are worth buying.

The article Play the Housing Rebound With These 3 Homebuilders originally appeared on and is written by Mark Yagalla.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.