The stock market continues to enthusiastically embrace hopes for a sustained housing market recovery. Over the past two years, homebuilder stocks have more than doubled in rebounding all the way back to pre-crisis levels last seen in early 2007. This optimism has also provided a vital source of encouragement for the broader market, as the health of housing is critical in supporting overall economic growth. But while the sector has certainly seen some meaningful improvement in recent years, serious questions remain surrounding the sustainability of the housing recovery. Thus, it is reasonable to explore ways that investors can continue positioning for a housing recovery while also hedging against the potential downside if such a sustained renewal fails to materialize in the end.
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