SPDR S&P Homebuilders ETF (XHB)

Housing market needs to 'get back into pace' amid interest rates

With the spring homebuying season around the corner, and mortgage rates rising after a two-week decline, investors may be wondering where a good entry point would be to add homebuilder stocks to their portfolios. UBS US Homebuilders & Building Products Equity Research Analyst John Lovallo joins Yahoo Finance to discuss the housing market and what investors should keep an eye on when considering some of the top homebuilding stocks. Lovallo affirms: "KB (KBH) and Lennar (LEN) are two homebuilders that we have buy ratings on and we have a favorable opinion on. For DR Horton (DHI) though... it's a couple things: One, it's the largest builder by volume, by call it 10 or 11 percent. There are a lot of advantages to the size and scale. They also attack what we believe is the hottest part of the market, which is that first-time entry-level buyer, where frankly you're looking at a need-based, event-driven, life-event driven — meaning children or marriage, things of that nature — type buyer... I think it checks a lot of boxes." For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live. Editor's note: This article was written by Nicholas Jacobino