Brookfield Narrows Loss, Home Builders Rally

Updated from 12:53 p.m. EDT

Home builders rallied on Monday on better-than-expected housing sales and Brookfield Homes'(BHS Quote) quarterly earnings.

Brookfield Homes narrowed its loss in the first-quarter, sending its shares soaring 8% to $5.21 in afternoon trading.

During the quarter, the company posted a loss of $10 million, or 39 cents a share, compared to a loss of $12 million, or 47 cents a share, in the year prior.

Revenue was nearly cut in half, falling to $37 million from $69 million, while new home orders dropped to 153 from 231 a year ago.

Separately, the National Association of Realtors said the volume of signed contracts to purchase previously occupied homes rose for the second month in a row.

Homebuyers are taking advantage of bargain prices, low interest rates and a tax credit, pushing the seasonally adjusted index of pending sales up by 3.2% to 84.6 in March. The results not only beat analysts' flat expectations, but were also 1.1% above last year's levels.

Across the sector, shares were in the green. M/I Homes(MHO Quote) jumped 13% to $16.42, Beazer Homes(BZH Quote) shot up 13% to $2.90, Hovnanian Enterprises(HOV Quote) rose 12% to $3.01 and Meritage Homes(MTH Quote) climbed 11% to $22.94. KB Home(KBH Quote) also increased 11% to $19.35.