So-called non-agency debt, which includes bonds backed by subprime mortgages, returned an average of about 21 percent last year, according to Amherst Securities Group LP.

“In a more subdued recovery we thought near-term total rates of return could be in the mid-teens and if we see higher numbers we could see total rates of return north of 20 percent,” Whalen said.

Homebuilders, which have rallied 64 percent in the past 12 months through yesterday, are also benefiting from the shrinking supply of existing property on the market. An 11-company gauge rose 0.6 percent today at 9:49 a.m. in New York and has advanced 14 percent this year. KB Home has surged 31 percent since December, and D.R. Horton Inc. 25 percent.

“As we look at construction and new-home building get back to more normalized levels, I think the stocks can do better, and that is certainly something that’s driven by consumer confidence,” said Eric Teal, chief investment officer at First Citizens BancShares Inc., a Raleigh, North Carolina-based firm that manages about $5.5 billion.

Substantially Improve

The Federal Open Market Committee has said the central bank is waiting for the labor market to “substantially” improve before ending its buying of $85 billion in bonds each month.

The number of people filing claims for jobless benefits over the past four weeks dropped to the lowest level since March 2008, according to data from the Labor Department in Washington yesterday. The February jobs report showed that hiring in construction jumped by the most in almost six years.

“Everyone knows that housing’s kicking into gear,” said Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania said in a Bloomberg Television interview. “They’re just underestimating the juice that it’s going to provide to the economy,” said Zandi.

First « 1 2 3 » Next