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Stocks tied to the housing market have performed well this year, and small-cap concern Champion Homes (NYSE: $SKY ) is no exception.

Two months into 2026 and Champion Homes stock is up 10%. Over the past five years, the company's share price has gained 110% despite struggles in the broader U.S. housing market.

Key to Champion Homes success is its niche focus on mobile and modular homes. This is not your typical home builder.

Based in Troy, Michigan, Champion Homes is one of the largest modular homebuilders in North America and provides factory-built housing across the U.S. and western Canada.

Demand for mobile and modular homes is growing among retirees and as prices for more traditional houses skyrocket.

Consider that the average cost of a Champion Homes mobile or modular house is $99,300 U.S. and you can start to see how the company attracts price-conscious consumers.

The strong demand has led to solid earnings, with Champion Homes recently posting fourth-quarter 2025 earnings per share (EPS) of $0.96 U.S., beating expectations for $0.84 U.S.

Revenue in Q4 of last year totaled $656.6 million U.S., exceeding the consensus estimate of $647.06 million U.S.

The company said it sold 6,270 homes in the U.S. alone during the final months of 2025.

In business continuously since 1953, Champion Homes has said that it's seeing a revival in its operations as track housing and other traditional homes become out of reach for people.

The company doesn't pay a dividend, but with a market capitalization of $5.15 billion U.S. it is firmly in the small-cap stock camp.

SKY stock could be a good way to diversify a portfolio, play a rebound in the housing market as interest rates move lower, and hedge against risks associated with the overheated artificial intelligence (A.I.) trade.