I am going to invest in home building stocks, what would be the best stocks to buy right now?

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Give me ticker symbols please.

Lol, probably not home building stocks - but who really knows. The obvious problem with homebuilders is that the sub-prime problems will clearly get worse for another year (maybe more and maybe alot worse) before they start getting better. On the other hand these stocks have taken some real hits, so who knows when their bottom has come.

So, if you are set on homebuilders - good luck and god bless, but I truly hope you have a long term perspective as short/ medium term this is risky to say the least.

About which ones to look at, try pulling up the whole group and looking at who has grown the most over the last 5 years or so. Stay away from those with significant operations in california, nevada, florida - or any of the other areas with huge sub-prime risk. Look at those that had great earnings during the good years. Also, make sure the one you choose has lots and lots of equity. It going to be a tough few years coming up and I guarantee many of the builders aren't going to make it. Make sure your has a spotless balance sheet to be sure they can weather the problems.

Best luck.

It's great to buy low -- except when the market drops lower.

I would definitely wait before investing in home builders. Mortgage resets in the first six months of next year will be double what they were this year, which will mean more distressed sellers.

I'd be weary of investing in home building in California. It's much harder for home buyers to get financing than it was just 8 months ago. For some borrowers, it's impossible for them to get financing today when they would have qualified for financing easily just a three quarters of a year ago. (There's an example below.) With that in mind, home builders have inventory for a shrinking number of customers. The customer base is shrinking not because of desire, but because of lack of qualification. Housing prices will likely fall to accommodate an evolved borrower. Although it's worse in CA, the mortgage crisis is nationwide. The real estate and mortgage industries have not EVER experienced a drop like this in years past, I would not invest in the housing market at this time. This is just my opinion. I've been in the mortgage industry for over two years. I worked in the corporate officer of a nationwide mortgage banker.

Here's an example of the difference between today and 8 months ago.

8 months ago, a borrower could qualify for a loan by simply telling the lender how much they make without proof (over-stating income was a common practice). Using that unverified income, the borrower could recieve 100% financing on their house; No money down.

Today, if a borrower needs to state how much they make without verifying income, they have to have 25% to put down on their house. Since houses are priced according to market, 25% is a lot of money anywhere. In Northern California that would be $137,500 on a $550,000 house. That has to be borrower's OWN money that they've earned or retained securely. If they cannot come up with that down payment and want 100% financing, they must show the lender how much money they make with tax returns. Most times, borrowers don't make enough money to qualify for the loan.

Builders will probaby have to lower prices to get their houses sold. If investing in building is still where you want to go, try markets where the housing prices are around $100,000 but the income levels are moderate to high. Or, you can invest in builders of commercial property or apartments. Those markets seem to be growing.

Good luck!

While keeping in mind that the sector is still very risky, the best way to invest in homebuilding is through the SPDR Homebuilding ETF, XHB. This way you will spread your risk across many different homebuilders and avoid putting all of your eggs in one basket.

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Home depot looks pretty cheap right now, although it may be flat for another year

Why buy into that sector now? They are just now experiencing the beginning of the storm. As bad as it is now, understand that the 2nd half of 2007 has a higher percentage of ARMs re-setting. The first half of 2008 had more ARMs re-setting that the entire year of 2007.

Many of those homes will be sold at a discount either to avoid foreclosure or after foreclosure. There are too many new houses in inventory now ... and the full force of the housing storm has even hit yet.

Lots of mutual fund that hold housing stocks will likely decrease their positions by the end of the year to "window dress" their year end portfolios. This will only increase the pressure on these stock values.

That would be like buying Airlines on October 2001

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