The short answer is not yet. Take a look at the two year chart of the Dow Jones US Home Construction Index. You can see the double bottom around 250 in December and January. The index then went to 400 and now trades at 390. The double bottom just described forms a bullish W on the chart. If we go long at all it will be with a 1/4 position just above 400 with a stop at 350. We will use an ETF, which has options on it such as the IYR.
What we really need is for a stock market style capitulation in the housing market. Right now home owners as well as potential buyers are holding out for a better price. So, who will win? Well the supply is on the buyers side. Once sellers give up and drop their prices the inventory can begin to clear, but this will not be an over night process, there is still the larger economy to consider and that stinks.
Back to the charts, the W is a very powerful pattern, but in this market we may wait for the 20 day moving average to turn up --or another momentum indicator– before stepping in.