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Better Housing Play: Home Depot or Lowe's?

Tim Brugger
July 2, 2012

Given the housing data announced on Tuesday, it wasn't surprising to see both Home Depot (NYSE: HD  ) and Lowe's (NYSE: LOW  ) jump out of the gate on a positive note. Investors have been waiting for a reason to jump onboard one of these industry stalwarts, and the best housing data seen around these parts in some time gave them the impetus they needed -- at least for a while.

Housing data
Many headlines following Tuesday's housing data was released were fairly optimistic, but as investors and shareholders dug a bit deeper, some found the information positive, but only mutedly so. Bulls focused on the upsides, and there were a few to chew on. The nationwide rise in home prices was the first in seven long, frustrating months for the housing and construction industries. The 1.3% increase in 20 major markets across our great nation brought the average prices back to levels not seen since 2003; that's all great stuff, right?

The flipside of the housing data dropped a bit of rain on this parade. The increase in home prices came after a March that was downright abysmal, so improvement was expected. But even with the slight increase, home prices are still down 1.9% for the year, and a full 34% off the ridiculous market boom highs. Naturally, this additional review of the information brought Home Depot and Lowe's investors back down to earth as Tuesday's trading continued.

But with all the ups and downs in the housing market, one thing is clear for investors: Even the most tepid housing news is likely to boost one, if not both, of these stocks. So what's the best option?