All investors realize the importance of discovering stocks that are about to skyrocket in order to increase their returns. It is difficult to know exactly which stocks or sectors are about to explode, as it is impossible to predict the future.

Nevertheless, Zacks Premium customers can utilize the Zacks Industry Rank Heat Map to discover which industries are currently rallying, and a quick glance at the Heat Map right now reveals that the home building space is currently one of the hottest corners of the market.

The home building industry has endured a positive trend, as it has moved from the 57th best industry to the 18th and into the top 7% on the Zacks Industry Rank List. Home builders have continued to prosper with a 30.57% YTD return, which significantly outpaces the S&P 500’s gains this year.

Now might be the perfect time to invest in this industry in order to avoid missing out on its impressive returns and future outlook. Check out these 5 home builder stocks to buy now:

1.  William Lyon Homes (WLH - Free Report)

William Lyon Homes is primarily engaged in the design, construction and sale of homes in California, Arizona, Nevada, and Colorado. William Lyon has exhibited intriguing growth prospects, such as a projected EPS growth of 38.39% and projected sales growth of 21.59%, which compare favorably to the industry averages of 17.26% and 7.31%, respectively.

Also, the company possesses an excellent price/sales ratio of 0.39, and the firm holds an earnings yield of 9.00%, which just edges out the industry average of 8.72%. Furthermore, William Lyon’s share price has increased by 37.87% over the past year. But the gains might not be over for William Lyon Homes, which was recently promoted to a Zacks Rank #1 (Strong Buy).

2.  NVR, Inc. (NVR - Free Report)

NVR Inc. is a holding company that operates in two business segments: the construction of homes and financial services. NVR boasts a disciplined business model, focused on maximizing liquidity and minimizing risk. In February 2017, the company’s board of directors authorized the repurchase of $300 million of its outstanding common stock. Furthermore, NVR shares gained 38.77% compared to the industry’s average growth of 30.11%.

NVR sports a beta rating of 0.66, which means that the investment is considered less volatile than the average security. Also, the company holds an impressive RoE of 29.33% and net margin of 7.90%, both of which beat the industry averages of 10.15% and 5.66%. NVR possesses an astounding cash flow per share of $121.18 in comparison with the industry average of $2.21. And finally, NVR was recently promoted to a Zacks Rank #1 (Strong Buy).

3. Meritage Corporation (MTH - Free Report)

Meritage Corporation is one of the nation’s largest single-family homebuilders. Meritage has defeated its earnings projections in each of its past six operational quarters by an average of 12.78%. Additionally, Meritage holds a respectable EV/EBITDA of 11.68 and sales/assets ratio of 1.05. Also, the company currently holds a “B” grade for Value, which means that we view the stock as possibly undervalued. Meritage is sporting a phenomenal price/sales ratio of 0.52, which helps contribute to its “B” grade for Value in our Style Scores system. This pairs well with its other strong Zacks metrics, such as its impressive Zacks Rank #2 (Buy) ranking.  

4. KB Home (KBH - Free Report)

KB Home constructs and sells a variety of new homes designed primarily for first-time, move-up and active adult homebuyers. The company remains focused on its core KB2020 business strategy which aims to boost scale in existing geographic footprint, improve profitability per unit, and generate a higher operating margin. Further, the company recently invested aggressively in land acquisition and development by spending $1.4 billion in land and development in fiscal 2016. In the first quarter of fiscal 2017, KB Home invested $302 million on land and land development.

KB Home has beaten its earnings projections in each of the past six quarters by a solid average of 13.90%. As of 60 days ago, KB Home’s full-year EPS estimates increased by 6.25% to an impressive $1.70. Additionally, KB home features a strong projected EPS growth of 51.68% and PEG ratio of 0.84, which compare favorably to the industry averages of 17.52% and 1.17. KB Home is also currently a Zacks Rank #1 (Strong Buy).

5. Taylor Morrison Home Corporation (TMHC - Free Report)

Taylor Morrison Home Corporation is a homebuilder and land developer engaged in building single-family homes. Taylor Morrison holds “A” grades for Value and Growth, which implies that we view the company as undervalued, yet possesses impressive growth opportunities for the future. The company features a current cash flow growth of 445.04% and cash/price ratio of 26.32, which beat the industry averages of 21.86% and 21.69, respectively. Also, Taylor Morrison holds a projected sales growth of 9.10% in comparison to the industry average of 7.31%. Taylor Morrison stock has skyrocketed by 50.19% in the past year, but now is still a great time to invest in this security that currently sports a Zacks Rank #2 (Buy).