NEW YORK -- An 11% jump in new-home sales in June sent homebuilders' shares surging Monday at midday.
Market watchers are poised for the beginning of a recovery in the protracted housing slump that helped drag the country into the longest recession of the postwar era, now nearing 20 months. Monday's report follows a string of positive signals on home construction, housing starts and homebuilders' sentiment from earlier this month.
On Monday, the Commerce Department said that sales of new homes in the U.S. rose 11% in June from the previous month to a seasonally adjusted yearly rate of 384,000.
That's the third straight month of higher sales and the largest increase in more than eight years. Still, the sales rate is down 21.3% from the same time last year.The median sales price in June, meanwhile, fell 12% to $206,200 from last year and 6% from May. The backlog of homes on the market also fell 4% in June from May -- a good sign for homebuilders. At the current sales rate, there's now 8.8 months' supply of homes to work through. That's the lowest level since October 2007. Capital Economics analyst Paul Ashworth said when that figure gets down to about 6 months worth of supply, home prices may begin to finally tilt higher. At the close, shares of Beazer Homes (BZH - Get Report) rose 36 cents, or 14%, to $2.95, while Hovnanian Enterprises (HOV - Get Report) added 26 cents, or 9.1%, to $3.11 and Centex (CTX) gained 86 cents, or 9.1%, to $10.29. Pulte Homes (PHM), which is buying Centex, rose 66 cents, or 6.8%, to $10.41. Ryland Group (RYL - Get Report) was up $1.14 to $20.54, and Lennar (LEN - Get Report) climbed 65 cents, or 5.9%, to $11.77.