NEW YORK (
) -- Stocks of homebuilders
rose in morning trading Wednesday after a
analyst suggested the group was ripe for consolidation.
"We think that the likelihood of consolidation in the home-building industry has increased given the industry specific and broader macro economic events of the past few months," noted Citi analyst Josh Levin. "We view consolidation as the proverbial elephant in the room. Management teams are not discussing the issue publicly, but we would be surprised if at least some of them were not talking about it privately."
Shares of Beazer jumped 5.6%, outpacing the group ahead of midday. Ryland added 2.8% and Meritage 2.6%. The
SPDR S&P Homebuilders
iShares Dow Jones US Home Construction
, exchange-traded funds that track the homebuilder sector and count Ryland among their top holdings, were 1.4% and 1.3% higher, respectively.
Separately, the Mortgage Bankers Association said early Wednesday that
on a seasonally adjusted basis, led by a 17.1% surge in refinance applications, while loan applications for home purchases actually decreased by 3.4%.
Refi applications accounted for 81.4% of all applications, the MBA said, up from
. It was the highest refi share of mortgage applications since January of 2009.
On Tuesday, the Commerce Department reported
to a seasonally adjusted rate of 546,000 units, from a downwardly revised rate of 537,000 in June.
Economists had expected the figure to come in at 560,000 units, and view the most recent numbers as further evidence that the housing market is still working to regain its footing after federal tax credits for homebuyers expired April 30.
VOTE: Do We Need Another Homebuyer Tax Credit?
Would a new round of credits help or hurt the housing market?
-- Reported by Miriam Marcus Reimer from New York.
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