Josh Levin, Citi homebuilding analyst, told CNBC Tuesday the shares may be rising because the market might be pricing in any potential good news on federal mortgage refinancing plans expected out of President Obama's speech next week.
In addition, Levin said, "homebuilder stocks have been eviscerated over the past few months, absolutely obliterated, so perhaps you are seeing a bit of a relief rally" following the S&P/Case-Shiller data showing a small quarterly increase in home sales.
Levin likes Beazer Homes , which he called "a very mispriced stock. ...That is a great play in the housing market."
In the same interview Daniel Oppenheim, Credit Suisse homebuilder analyst, is also cautious about the sector.
"We want to see housing demand," he said. "I think what we need to see is much greater consumer confidence out there; and home buyer activity, which we’ve seen slipping."
He thinks builder MDC Holdings is "attractively priced."
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Disclosures:
Neither analyst owns shares of the companies mentioned but their employers have investment banking relationships.