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Though interest rates have started increasing lately, they are still below historical levels and housing is still affordable. Thus, high affordability levels, increased rentals and historically-low interest rates are driving the housing recovery. In addition, accelerating job growth and increasing consumer confidence are also boosting the demand for new homes.

Recent data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau showed that sales of newly built, single-family homes rose 9.6% in Jan 2014, which is the strongest since July 2008. Sales growth was driven by the release of pent up demand for new homes.

In order to cater to the increasing demand, most of the homebuilding companies like Ryland Homes, Inc. (RYL - Snapshot Report) and KB Home (KBH - Analyst Report) are investing heavily in building homes.

Ryland Homes recently unveiled new townhomes and apartments at Acacia at Cypress Village, in Irvine, Calif. Home prices start from $400’s. Homebuyers can choose from four floor plans. These homes feature 2 bedrooms, 2 and a half baths, porches, walk in closets and a 2 car garage. The community comes under the Irvine Unified School, District which includes Jeffrey Trail Middle School and the upcoming Cypress Village Elementary School.

Located in the City of Irvine, Cypress Village offers various dining, entertainment and employment options. Residents can also spend time at the parks and recreational facilities.   

Ryland Homes carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

Investors interested in the homebuilding sector can also consider stocks like William Lyon Homes (WLH) and Taylor Morrison Home Corporation (TMHC - Snapshot Report). Both the companies sport a Zacks Rank #1 (Strong Buy).


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