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Tickers in this Article: HOV, TOL, KBH, LEN
The homebuilding market in this country will resurrect itself and make a strong comeback - we just don't know when. Some argue that demand for new homes could be lackluster in the near-term, largely because of the huge number of unemployed, and the uncertainty for many regarding their future incomes and primary jobs. Others are more optimistic and see a generally quicker return to the norm.

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The Latest Data
According to the Associated Press, construction of new homes and apartments fell 5.9% in February, to a seasonally adjusted annual rate of 575,000 units. The chatter on Wall Street is that lousy weather and the number of foreclosures on the market are likely to have impacted the figures.

The number of foreclosures will remain a big issue in the foreseeable future, as job security is almost non-existent these days, and interest rates are likely to head higher in the next year, which could impact the ability of some to pay their debts. Higher interest rates could also have an impact on those who currently have existing adjustable mortgages, because they would likely reset at a higher rate and be a higher burden. This flies in the face of the cheerleaders that seem to think that the U.S. economy and consumer spending are poised to return to pre-crash levels.

Time to Build a Position?
Of course, for those that are patient and willing to park their money in homebuilding stocks right now, there is opportunity over the long haul. For example, Thomas Pellerito, who is Hovnanian's (NYSE:HOV) chief operating officer, bought 300,000 shares at $3.54-3.55 per share earlier this year. That's a very large financial commitment, and not one that Mr. Pellerito would likely take on, unless he thought there was going to be eventual upside to be had.

However, executives at other large name homebuilders have been rather quiet. Toll Brothers (NYSE:TOL) have not been buying stock in the open market in the new year. Insiders have also apparently been remarkably quiet on the buy side at Lennar (NYSE:LEN). However, maybe that will change once the company releases its earnings later in the month. Meanwhile, at KBHome (NYSE:KBH), the data shows that there was some insider buying, but back in October. In short, if things were going to be very rosy going forward, expect to see more open market activity on the buy side by insiders. (Find out why the trading activity of executives can be valuable in Can Insiders Help You Make Better Trades?)

The Bottom Line
While a homebuilder resurgence will likely happen, don't wait for the sector to be firing on all cylinders this year. The recent data suggests that this patient is still quite ill. Moreover, the recent insider activity doesn't exactly convey a message of bullishness either.

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