NEW YORK (AP) — Homebuilder stocks rose Friday as a new government report said that U.S. developers broke ground on new homes at a faster pace in July.
The Commerce Department said that builders began work last month on houses and apartments at a seasonally adjusted annual rate of 896,000 — up 6 percent from June. The rise was all due to apartment construction, which tends to be volatile. There were fewer single-family homes being built. These homes make up the bulk of the market.
Still, builders broke ground on 15 percent more single-family homes in July than a year earlier.
Michael Dolega of TD Economics said in a client note that the increase in housing starts in July was welcome news, but that there seem to be signs of a slowdown in new construction when compared with earlier this year. This did not dampen the analyst's optimism though, as he pointed out that new home sales continue to be strong and traffic remains steady, which has pushed the homebuilder confidence index near 2005 levels.
A look at how some homebuilders are faring in morning trading:
D.R. Horton Inc. gained 48 cents, or 2.5 percent, to $19.60.
KB Home climbed 48 cents, or 2.8 percent, to $17.69.
PulteGroup Inc. added 50 cents, or 3.1 percent, to $16.41.
Toll Brothers Inc. rose 46 cents to $32.79.
Hovnanian Enterprises Inc. climbed 13 cents, or 2.4 percent, to $5.45.
Lennar Corp. rose $1.10, or 3.3 percent, to $34.38.