Home Builders' Shares Lifted By Pending Sales Data

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Home builders' stocks got a boost Monday when a real estate brokers' trade group said pending home sales last month grew to their highest level since June 2013. The National Association of Realtors said contract signings rose 3.1 percent and are now 12 percent above February 2014. Shares of several home builders were outpacing gains in a broadly higher market Monday. KB Home
KBH
picked up nearly 2.7 percent to $15.68; D.R. Horton Inc.
DHI
rose 2.5 percent to $28.11 and Lennar Corp.
LEN
gained 2.4 percent to $51.69. The S&P 500 was up 1 percent while the exchange-traded fund SPDR S&P Homebuilders
XHB
increased 1.6 percent to $36.79. The real estate brokers' group said sizeable gains in signed sales contracts in the Midwest and West last month were offset by smaller declines in the Northeast and South. The trend is getting driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents, according to the group's economist Lawrence Yun. "These factors bode well for the prospect of an uptick in sales in coming months," Yun said. But Yun added that the underlying obstacle continues to be the depressed level of homes available for sale.
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Posted In: Analyst ColorNewsEcon #sAnalyst RatingsConsumer DiscretionaryHomebuilding
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