Doubts among economists and some builders notwithstanding, investors seem to think the home construction market is a good place to be.

The Wall Street Journal reported Thursday that a Dow Jones index that covers the industry is up 30 percent in the fourth quarter.

"Hedge funds run by Caxton Associates LP, SAC Capital Advisors LP, Avenue Capital and Blackstone Group LP have been buying housing-related investments, betting on a rebound," the newspaper said.

It added that Zelman & Associates, a firm that had been bearish on the housing sector, now predicts an increase and that Goldman Sachs agrees.

The newspaper quoted Andrew Law, chief investment officer at $10 billion hedge-fund firm Caxton, as saying, "We turned bullish on housing. A rebound is coming" in home prices and construction in 2012.