NEW YORK (AP) — Shares of homebuilders posted slight gains Tuesday, amid an overall up market, after the release of mixed housing data.

According to the Commerce Department, sales of new homes dropped to a seasonally adjusted annual rate of 411,000 in February. That's a decline of 4.6 percent from the January level of 431,000, which had been the strongest sales pace since September 2008.

But even with the February decline, sales were still 12.3 percent higher than a year ago. While sales remain below the 700,000 level considered healthy, the housing recovery is gaining strength and is starting to look sustainable, helped by job creation and near record-low mortgage rates.

Meanwhile, another study showed that U.S. home prices rose in January at the fastest annual pace since June 2006, just before the housing bubble burst, pointing to a strengthening recovery ahead of the spring home buying season.

The Standard & Poor's/Case-Shiller 20-city home price index climbed 8.1 percent in the 12 months ending in January. That's up from a 6.8 percent annual gain in December. Prices rose in all 20 cities in the index, with eight markets posting double-digit increases.

KeyBanc analyst Kenneth Zener is optimistic about homebuilder stocks in general, saying that it's a matter of when, not if, housing demand stabilizes.

Zener said his top picks in the sector include Lennar Corp., because its "aggressive and profitable" restocking of its land holdings justifies a higher-than average stock price, and Toll Brothers Inc., which benefits from its focus on luxury homes in the Northeast.

Here's how shares of some homebuilders were trading Tuesday:

— Lennar, up 35 cents to $41.91.

— Toll Brothers, up 26 cents to $35.43.

— Hovnanian Enterprises Inc., down 8 cents to $5.98.

— D.R. Horton Inc., down 6 cents to $24.42.

— PulteGroup Inc., down 4 cents to $20.31.

— The Ryland Group Inc., up 37 cents to $42.17.

— MDC Holdings Inc., up 18 cents to $37.93.

— KB Home up 17 cents to $22.16.