The Best Ways to Play the Housing Rebound: Lumber Liquidators Holdings Inc (LL) and More

It’s not just about this year’s growth rates. Traditional discount department store chains continue to expand their housewares and lawn centers.

We also can’t forget about the Internet. While online retailers may be challenged in selling hefty dishwashers or offering same-day delivery of tarps after a roof-busting storm, cheaper dot-com pricing on thermostats and chandeliers will eat into the foot traffic at your local hardware store.

Sure, the “showrooming” effect won’t be as hard on Home Depot and Lowe’s as it will be on consumer electronics chains, but it will eat into sales.

Lumber Liquidators is a brick-and-mortar outfit too, but replacing living areas with hardwood requires more hand-holding than simply ordering a new garden hose.

Trex actually makes its own decking and related materials that it resells through several distributors, so it will hold up just fine.

Bet on the house
No matter where you stand on any of these four companies, the home improvement market will grow. There have been years of pent-up demand, and it’s just now starting to get cooking.

The bank is less likely to foreclose on a home — and homeowners are more likely to be current on their mortgage payments — in a climate of rising prices and fewer underwater mortgages.

As homeowners grow more comfortable in the freedom to customize their properties, home improvement is a smarter bet than buying into the actual homebuilders, who will only benefit if the appetite for new construction accelerates.

Improve your home. Improve your portfolio.

The article The Best Ways to Play the Housing Rebound originally appeared on Fool.com and is written by Rick Aristotle Munarriz.

Longtime Fool contributor Rick Aristotle Munarriz has no position in any stocks mentioned. The Motley Fool recommends Home Depot, Lowe’s, Lumber Liquidators, and Trex. The Motley Fool owns shares of Lumber Liquidators and Trex.

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