Building Investments In 2010

When last year's economic and financial crisis was full upon us, the blame was laid squarely at the feet of a group of all-too-ambitious mortgage financiers, who were prepared to take giant risks offering credit to under-qualified and under-capitalized buyers and builders. It was understood at that time that the housing sector would suffer and that pending the absorption of a great number of surplus homes, the recession would remain. (For more tips on investing in real estate, read 5 Things Every Real Estate Pro Knows.)

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However, we've seen the number of monthly mortgage applications rise and house prices, as measured by the S&P/Case-Shiller Home Price Index, begin to slowly recover. The largest homebuilders are coming off bottoms set in 2009 and are looking to turn a corner as we continue on through 2010.

Here are five of the largest American homebuilders - those firms with the best market outlook should the recovery continue into the new decade.

Baltimore's Behemoth Builder
The largest of the publicly-traded builders is NVR, Inc. (NYSE:NVR) with a market capitalization of greater than $4.2 billion. NVR operates predominantly in the eastern U.S., in and around the Baltimore-Washington D.C. corridor. NVR stock found its legs early in 2009, rising over 55% on the year and it is currently sitting just below its 52-week high.

Over the last six months, Pulte Homes, Inc. (NYSE:PHM) returned more than 34% to investors. Pulte has a market cap of roughly $4.17 billion and conducts its land acquisition, development and financing operations across the continental United States.

D.H. Horton, Inc. (NYSE:DHI) stock did well last year, with a rise of close to 60%. The company operates across 27 states and has a market cap in excess of $3.8 billion. DHI is entered 2010 with a surge, having tacked on close to 15% since November housing sales data were released mid-December.

Toll Road to Market Riches
Toll Bros., Inc. (NYSE:TOL) stock gained better than 15% in the last six months trade, and carries a market cap of slightly more than $3.2 billion. The company specializes in the luxury home market and also develops and operates several golf courses and clubs.

Lennar Corporation (NYSE:LEN) is another player in the residential home builder class, but the only one of the aforementioned companies to offer investors a dividend, however nominal. Lennar has a market cap of nearly $3 billion and has a six month return up over 95%.

The Wrap
This year is looking strong for the homebuilders. Recent momentum and stronger economic data will definitely benefit the aforementioned companies. (For other related readings, refer to Selling Your Home In A Down Market.)

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