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Power Play: Time to look at homebuilders

A worker carries lumber as he builds a new home in Petaluma, California.
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A worker carries lumber as he builds a new home in Petaluma, California.

Homebuilders are taking a big hit this year, down 15 percent year-to-date, but the outlook may be getting better for this beaten-down sector.

Darin Richards, chief investment officer of AKT Wealth Advisors, tells CNBC's "Power Lunch" on Thursday he is bullish on the group.

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"The prospect of higher interest rates put pressure on homebuilders. However, supply remains low and demand is robust," Richards said.

He also believes homebuilders do not have to worry about the Fed right now. "It appears that the Fed may be pulling back on its initial projection of four rate hikes this year," Richards said.

Homebuilders are higher during trading.