An increasing number of Wall Street firms are pointing to housing stocks as one of the few areas of the market left that still have potential for growth.
"After more than six years into this recovery, we believe there are few opportunities in U.S. equities that offer stronger growth and cheaper valuation than housing," said Dubravko Lakos-Bujas, JPMorgan's U.S. head of equity strategy, in a report to clients Thursday.
Investors got two pieces of evidence this trend is alive and well Tuesday after the government said housing starts approached an eight-year high and Home Depot credited the "continued recovery of the U.S. housing market" for better-than-expected sales last quarter.
JPMorgan believes a combination of a strong labor market, high consumer confidence, historically low interest rates along with tight inventories will continue to fuel real estate investments.
Based on consensus estimates, housing stocks are projected to grow earnings by about 50 percent during 2015 and 2016, according to the report.