NEW YORK (CNN/Money) - Most CEOs duck questions about the price of their company's stock, but Laurence Hirsch, who runs No. 1 home builder Centex, takes the matter head on.

"It has been mis-valued for some time," Hirsch said Friday as Centex shares rose 0.7 percent to a 52-week high of $74.79. "There's something fundamentally wrong that's been going on here."

Hirsch's frankness in the face of such gains may be aimed at skeptics who have long argued that home-building stocks, which have doubled and tripled the last few years, can't go any higher.

With consumer confidence weak and the job market sluggish, can the housing market -- one of the economy's few pillars of strength -- continue to hold up, these people ask.

But these arguments, made for the last two years, have yet to prove correct in the face of interest rates that keep hitting historic lows.

The fast-consolidating home-building business is enjoying blistering growth. And if Wall Street profit forecasts are correct, then the stocks, as Hirsch believes, still seem cheap.

Take Centex (CTX: Research, Estimates), whose stock is up 204 percent since 2000 began. Analysts surveyed by earnings tracker First Call expect 2003 profits of $9.96 a share from the Dallas-based company, up 31 percent from the prior year. This means that Centex is trading at 7.5 times expected earnings, compared to 17.4 times profits for the Standard & Poor's 500 index.

Another home builder, Lennar (LEN: Research, Estimates), whose shares are up nearly eightfold since the start of 2000, trades at just eight times this year's profit forecasts.

Kenneth Heebner, who founded the Boston money management firm Capital Growth Management, owns large stakes in Lennar and other big home builders, such as D.H. Horton (DHI: Research, Estimates), Centex, KB Home (KBH: Research, Estimates) and Pulte Homes (PHM: Research, Estimates).

Heebner attributes some of the stocks' recent run to the steep drop in mortgage rates. The 30-year fixed-rate mortgage hit a record low of 5.34 percent this week, according to the Mortgage Bankers Association.

Heebner also credits a Thursday Wall Street Journal report that argued home builders will continue to grow through acquisitions and greater access to affordable capital.

"This group has been controversial," Heebner said, "but the worries have been widely discussed."

The nation's housing market, which has held up amid the multiple shocks of the Sept. 11 attacks, the war in Iraq and the bursting of the 1990s tech bubble, could, of course, eventually collapse like it did in the late 1980s.

But perhaps not yet.

Economists surveyed by Reuters expect that sales of existing homes, due Tuesday, grew at an annual rate of 5.67 million in April, up from a 5.53 million rate in March. Another report due Tuesday should show that while new home sales slipped to an annual rate of 980,000 in April, they stayed near the prior month's 1 million, itself near the record high.

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One worry is deflation, the sustained fall in prices that Federal Reserve Chairman Alan Greenspan has called a distant possibility. The home-building business could suffer if consumers bet they can buy homes at lower prices by waiting.

"It's going to be tough to come up with substantial growth anymore," said Michael Jaffe, who follows the industry for Standard & Poor's and does not own any of the stocks he covers.

But Hirsch, the Centex CEO, remains encouraged by the rising rate of home ownership in the United States, as well as other demographic trends.

He's also betting that an uptick in consumer confidence and the possibility of some stability in the job market will keep demand for housing strong. Consumer confidence sank to 10-year lows before the war in Iraq and the job market has been weak for two years.

"Certainly over the intermediate term, things look awfully good," Hirsch said.

Shares of Centex, up 48 percent this year, appear to back that up.