NEW YORK (TheStreet) -- Shares of PulteGroup Inc. (PHM) - Get Report are higher by 2% to $21.97 in late afternoon trading on Tuesday as homebuilder stocks get a boost from the rise in new home sales.

Data from the Commerce Department showed new home sales in February grew by 7.8% to an 539,000 annualized pace.

New home sales increased the most last month since February of 2008, Bloomberg reports, adding that the median forecast of 76 economists polled by the publication called for the pace to drop by 464,000.

Job growth, soft but positive income growth, low mortgage rates, and gradually easing access to credit helped to boost new home sales in February, Gus Faucher a senior economist at PNC Financial Services Group told Bloomberg.

"I would expect we'd see further gains over the course of this year," Faucher added.

Separately, TheStreet Ratings team rates PULTEGROUP INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate PULTEGROUP INC (PHM) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in stock price during the past year and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

• The revenue growth came in higher than the industry average of 0.8%. Since the same quarter one year prior, revenues rose by 10.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
• The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels.
• The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
• PULTEGROUP INC's earnings per share improvement from the most recent quarter was slightly positive. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PULTEGROUP INC reported lower earnings of $1.25 versus $6.74 in the prior year. This year, the market expects an improvement in earnings ($1.33 versus $1.25).
• The change in net income from the same quarter one year ago has significantly exceeded that of the Household Durables industry average, but is less than that of the S&P 500. The net income has decreased by 1.3% when compared to the same quarter one year ago, dropping from $220.05 million to $217.09 million.
• You can view the full analysis from the report here: PHM Ratings Report