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Housing still a safe haven?

A worker cuts a piece of pipe as he builds a new home in Petaluma, California.
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U.S. housing has been a rare bright spot in the recent global selloff, with housing stocks driving growth as the markets stumble.

Two ETFs that are a proxy for the sector have powered ahead this year, despite the broader market volatility. The SPDR S&P Homebuilder ETF and the iShares U.S. Home Construction ETF are both up more than five percent year-to-date.

Separately, Standard & Poor's/Case-Shiller 20-city home price index has risen 5 percent in June from a year earlier.

Read MoreS&P/Case Shiller: Home prices rise again

On Tuesday, new data on the health of America's housing market came in right along expectations, with new new-home sales rising 5.4 percent last month to a seasonally adjusted annual rate of 507,000, recovering from a slide in purchases in June.

Toll Brothers, the nation's largest luxury home builder, echoed the positive sentiment on its earnings call Tuesday, with a twelve percent jump in orders for the third quarter, another indication the housing recovery is gaining ground.

But will market volatility hurt consumer confidence in housing? Redfin's index of overall buyer demand slipped in July for the fourth straight month, while Zillow and S&P economists have noted buyers are getting increasing price fatigue.

Chad Morganlander, a money manager with Stifel, remains bullish on the sector. Morganlander told CNBC's "Power Lunch" his timeline for homebuilders. "We expect housing stocks to rise over the next 12 to 24 months, with the sector fueled on by mortgage credit growth. You just have to be patient and have a three to five month time horizon.

Megan McGrath, senior homebuilding analyst at MKM Partners told "Power Lunch" she remains a bit more cautious on the sector. "We are positive but selective on housing stocks right now. Because of the choppiness, we would rather buy the larger cap names, like Toll Brothers, while steering clear of smaller caps."

Best bets in housing