Hovnania: Housing Winners and Losers

(Updated with closing prices)

NEW YORK (TheStreet) -- Housing stocks were mixed Thursday after data showed housing starts improved in August, but construction of single-family homes fell for the first time in six months.

The Commerce Department reported that housing starts rose by 1.5% last month to an annual rate of 598,000 units. It's the highest level since last November, but it's still below the rate of 600,000 units expected.

Last month's increase reflected a 25.3% surge in construction of multifamily units. But single-family home construction fell 3%.

"It is perhaps a bit worrying that all the increase in August came in the volatile multi-family starts component," said U.S. economist Paul Dales at Capital Economics. "With housing starts still some 74% below their 2006 peak, the recovery is therefore going to be a very long-winded process."

Regionally, construction rose 23.8% in the Northeast and 0.9% in the Midwest. Activity was flat in the West and fell 2.4% in the South.

Also on Thursday, Freddie Mac (FRE Quote) said rates for 30-year home loans fell for the third week in a row and are close to record lows reached over the spring. The average rate for a 30-year fixed mortgage was 5.04%, down from 5.07% a week earlier.

By mid afternoon, the Dow Jones U.S. Home Construction Total Stock Market Index was down 1.7% to 3,059.95.

At the close, shares of Hovnanian Enterprises (HOV Quote) rose 24 cents, or 5.4%, to $4.65, and Beazer Homes USA (BZH Quote) was up 30 cents, or 6.1%, to $5.13.

KB Home (KBH Quote) shares fell 82 cents, or 4%, to $19.69, and Toll Brothers (TOL Quote) lost 64 cents to $21.53. Lennar (LEN Quote) fell 78 cents, or 4.5%, to $16.60, but earlier set a 52-week high of $17.66.

Credit Suisse analyst Daniel Oppenheim said the real estate market seems to be improving and he expects Lennar to report a 2.5% drop in third-quarter orders, an improvement over his prior forecast for a 22% decline.