Although the Homebuilding sector is up an "impressive" 44% year-to-date, effectively reversing last year's decline, driven by a rebound in several fundamental metrics and a decline in interest rates, the stocks still contain "some modest remaining upside potential," JPMorgan analyst Michael Rehaut wrote to investors earlier in a research note. The analyst anticipates further improvement across most industry and company data points. However, volatility in the stocks over the last 18 months requires a disciplined approach to the group, cautions Rehaut. With that in mind, the analyst today upgraded PulteGroup (PHM) to Overweight from Neutral, saying its valuation is attractive relative to his fundamental outlook. Rehaut also downgraded NVR (NVR) to Underweight from Neutral following the stock's outperformance year-to-date. He also upgraded Century Communities (CCS) to Overweight from Neutral and Meritage Homes (MTH) to Neutral from Underweight. In addition, the analyst downgraded LGI Home (LGIH) to Neutral from Overweight and reiterated Overweight ratings on Lennar (LEN), Taylor Morrison (TMHC) and William Lyon Homes (WLH).