Homebuilder shares rise as survey sparks optimism
The shares of a number of major U.S. homebuilders gained in trading Tuesday following a report that confidence in the industry is at its highest level in years.
The National Association of Home Builders/Wells Fargo builder sentiment index released Tuesday increased 2 points in December to 47. That's the highest reading since April 2006, before the housing market crashed and the last time the index was above 50. Readings below 50 suggest negative sentiment about the housing market. Still, the index has been trending higher since October 2011, when it stood at 17. The index is based on responses from 441 builders.
The increase in the index is the latest evidence that the housing market is slowly recovering, said Sterne Agee analysts Todd Vencil and Kevin Bennett.
The news sent shares of the following homebuilders up in afternoon trading:
DR Horton Inc. increased 36 cents, or 1.8 percent, to $20.05.
Hovnanian Enterprises Inc. increased 15 cents, or 2.6 percent, to $5.95.
Lennar Corp. increased 74 cents, or 1.9 percent, to $39.54.
PulteGroup Inc. increased 52 cents, or 2.9 percent, to $18.56.
Toll Brothers Inc. increased 28 cents, or less than 1 percent, to $3.250.