Is it time to finally feel optimistic about the U.S. housing market’s prospects? Maybe. Homebuilders are more confident and this morning, housing construction numbers rolled in better than expected. There are a pair of exchange traded funds (ETFs) for you to play along at home.

In March, home construction rocketed up a cool 1.6% to the highest level in 16 years. The gains were led primarily by growth in single-family home construction.

Can we feel comfortable about real estate now? Well…yes and no.

  • Yes, the home rush is on. Buyers are scurrying to qualify for an Obama administration cash incentive by signing deals ahead of an April 30 deadline in an effort to bank the $8,000 tax credit. Courtney Schlisserman for BusinessWeek reports that the builders’ gauge of current home sales has risen to the highest level in two years, thanks to the incentives.
  • Record low mortgage rates are also luring buyers. Loans on the cheap are a powerful incentive.
  • Homebuilder sentiment this month rose four points to 19, the highest reading since September. [Will the Rally Expire with Incentives?]

On the downside, unemployment numbers are still relatively high and the job market is not yet stable enough to support a total turnaround. Also, when homebuilders were asked about their expectations for later this month, they were a little less hopeful, Alex Viega for Associated Press reports. Many expect that sales will drop later this year and that high unemployment will continue to be a thorny issue. [Pending Home Sales Lift ETFs.]

For more stories about homebuilders, visit our homebuilders category.

  • SPDR S&P Homebuilders (NYSEArca: XHB)