TRUCKEE, Calif. - Construction spending rose 1.4 percent to an annual rate of $872.1 billion in the most recent report released on December 3rd. Private residential spending rose by 3 percent in October. Home building is expected to add to economic growth this year for the first time since 2005, though it is not nearly as strong as it was before the recession of 2007-2009.We are still getting some mixed messages from the home-building sector; new home sales fell in October by 0.3 percent to a 368,000 annual rate while the numbers for September were revised downward from 389,000 to 369,000.Small investors can participate in a housing rebound even if they already own a home or are not in a position to purchase one. There is an exchange traded fund that represents the homebuilder's index. This year it has already had a gain of more than 50 percent. The homebuilder's index consists of stocks from across the industry. Some of them are in the new home construction business and others in businesses that support homebuilding. Whirlpool is a component and they are in the business of making and installing appliances like dishwashers and washing machines. Lowe's is another well known name that is in the retail hardware and construction supply business.Another way to invest in real estate is through the real estate index exchange traded fund. The real estate index fund is broadly diversified across the real estate sector and includes exposure to international real estate. The index consists of companies that own office space, shopping malls, senior housing and even towers for cellular communication.Many of these stocks are set up as real estate investment trusts, known as REITs which have some tax advantages over common stocks. The current dividend yield of the real estate index ETF is 3.43 percent, which is respectable in today's record low interest rate environment. Year to date the real estate index is up over 15 percent.There are forecasters who are saying that the housing rebound could already be peaking because the gains were due to pent up demand that has already been filled. However, most economists see the housing rebound as continuing for several reasons including record low interest rates. Fed chairman Ben Bernanke has stated that the central bank will take action to speed growth, including the loosening of tight lending rules. In spite of the recent bubble, over the long term real estate is still one investment that has kept pace with inflation.Kenneth Roberts is a Truckee based Registered Investment Advisor. Information on his money management service can be found at his blog at www.sellacalloption.com or by calling 775-657-8065. Past performance does not guarantee future results. Consult your financial adviser before purchasing any security.