Despite Disappointing Housing Outlook, Homebuilders Surge (TOL, PHM, KBH, LEN)

Despite a housing survey showing continued weakness, homebuilders are surging this afternoon. Toll Brothers

, PulteGroup

, KB Home

, and Lennar Corporation

are all higher by more than 3%. According to a Reuters report, "The National Association of Home Builders/Wells Fargo Housing Market Index was unchanged at 13, matching last month's level, which was the lowest since March 2009. Economists polled by Reuters expected a rise to 14." A reading above 50 indicates that builders view sales conditions as good. The index hasn't been above 50 since early 2006. "The stall in the nation's housing market continues," said David Crowe, NAHB chief economist, noting that builders see the weak jobs market and high foreclosure levels as the two primary obstacles to new home sales. Markets largely ignored the news, and rallied ahead of Tuesday's statement from the Federal Reserve. "You'd hope to get some recovery in housing, but that's not going to happen soon. The whole bubble began with real estate and it remains the big issue for the economy. You have way too much surplus and not enough people who qualify for loans, meaning housing numbers will remain weak for a while," Cliff Draughn, president and chief investment officer at Excelsia Investment Advisors in Savannah, Georgia told Reuters. Shares of Toll Brothers are higher by 3.1%, to $18.60. PulteGroup is up 4.24%, to $8.60. KB Home is up 5.5%, to $11.88. Lennar Corporation is surging more than 8%, to $15.24.