LOS ANGELES (AP) â¿¿ U.S. homebuilder stocks surged on Friday as investors hoped that recent building trends and easing unemployment would draw the housing market from its long downturn.
A Labor Department report Friday said that the nation's unemployment rate fell to its lowest level in three years. Consumers' fears about losing jobs and their difficulties finding employment have been some of the main drags on home sales in recent years, so any signs of improvement on the jobs front are seen as a positive for housing.
On Thursday, several homebuilders were upbeat about future construction. M/I Homes Inc. and Beazer Homes USA Inc. said sales and new orders rose sharply in the October to December quarter, during which sales of new homes rose nationally.
PulteGroup Inc. and MDC Holdings Inc. said the period had been mixed, but PulteGroup CEO said he was pleased with business activity in January. And MDC Holdings CEO Larry Mizel said new home orders jumped 30 percent last month.Only PulteGroup ended the quarter with a smaller backlog of homes under contract than a year earlier, and its backlog fell less than 2 percent. The rest posted strong annual backlog growth. Backlog is an indicator of potential home deliveries and revenue for homebuilders, so that bodes well for the builders' current quarter. Nationally, recent data on home construction and pending home sales have been positive, an indication that the troubled housing market improved at the end of last year. Builders are hoping sales recover this year after a dismal 2011 that may end up being the worst year for new-home sales on records dating back half a century. Shares of Beazer Homes led the sector rally on Friday, rising 32 cents, or 9.9 percent, to $3.57 in afternoon trading. D.R. Horton Inc. rose 47 cents, or 3.3 percent, to $14.59; Lennar Corp. added $1.28, or 6 percent, to $23.02; PulteGroup gained 50 cents, or 6.5 percent, to $8.25; KB Home rose 80 cents, or 8.4 percent, to $10.39; Hovnanian Enterprises Inc. added 23 cents, or 8.8 percent, to $2.78; and, Toll Brothers Inc. rose 97 cents, or 4.3 percent, to $23.50.