Updated from 12:53 p.m. EDT

Home builders rallied on Monday on better-than-expected housing sales and

Brookfield Homes'

( BHS) 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) - Get Report

jumped 13% to $16.42,

Beazer Homes

(BZH) - Get Report

shot up 13% to $2.90,

Hovnanian Enterprises

(HOV) - Get Report

rose 12% to $3.01 and

Meritage Homes

(MTH) - Get Report

climbed 11% to $22.94.

KB Home

(KBH) - Get Report

also increased 11% to $19.35.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.