An early Tuesday homebuilder stocks rally triggered by better than expected earnings from industry heavyweight Lennar Corp. (LEN) - Get Report cooled by session end, and left the sector with only modest gains.
Lennar shares rose more than 5 percent early in the session after the homebuilder had said its second-quarter earnings topped analysts' estimates and said contrary to recent data the U.S. housing market is in good shape.
"The overall market improvement was supported by our highest quarterly new orders in the last ten years of 8,898 homes, a 12% increase year over year. Home deliveries and revenues from home sales increased 15% and 18%, respectively, year over year, while our backlog dollar value increased 20% to $4.0 billion," Lennar CEO Stuart Miller said in a press release.
The company said it earned $213.6 million, or 91 cents a share compared to $218.5 million, or 95 cents a share.
The results were 16 percent ahead of the 79 cents a share Wall Street consensus estimate as compiled by FactSet.
"We are now seeing, contrary to recent reports on housing starts and building permits, more of a reversion to normal in the housing market than the slow and steady recovery pace of the last several years," Miller said.
Lennar shares added 2.1 percent, or $1.13 to close at $53.871.5 percent to close at xxx. Rival builders also rose, Beazer Homes (BZH) - Get Report rose 1.8 Percent to $13.09, D.R. Horton Inc. (DHI) - Get Report rose 1 percent to $34.17 and Toll Brothers Inc. (TOL) - Get Report rose 0.7 percent to $39.02.