"Stock market investors are clearly betting on a bright future for residential real estate, turning their attention to ancillary companies that will benefit from the trickle down nature of a true recovery. In fact, the early stages of a housing rebound have played out in similar fashion over the last 40 years, this one included, " notes Palacios.
So if you're taken by that 176% jump in wallboard, then you want to put your money in USG and Eagle Materials . If the 124 percent jump in flooring strikes you, then head to Lumber Liquidators and Armstrong World Industries . The kitchen and bath play works for Caesarstone , which makes countertops and backsplashes. Equipment rentals also have plenty of room to grow, and that's H&E Equipment .
Even more interesting are the non-pure plays, or companies you don't expect. For example, those that are big into land; they're up 56 percent, so look to the St. Joe Company, Howard Hughes Corp and Forestar Group . Or take a real outlier in the mortgage space, like Ellie Mae Inc . They went public last year, and the stock is up 405 percent year-over-year. They provide electronic mortgage origination in the U.S., according to Palacios, and their mortgage management software handles 20 percent of all U.S. mortgage originations.
