Homebuilding stocks rallied Thursday, boosted by low mortgage rates and hopes that Congressional tax plans could benefit the sector.

Analysts at JMP Securities said public homebuilders are good candidates for higher dividend payouts because of their high levels of cash and insider ownership, according to Briefing.com. Also, the Senate proposal calls for homeowners with income under $100,000 to be able to write off private mortgage insurance, Briefing said.

"That would definitely stimulate the sector," said Larry Horan, director of research at Parker/Hunter.

The $318 billion Congressional bill would cut taxes on dividends and capital gains for several years. It was approved by House and Senate negotiators Wednesday, and could be passed by both chambers of Congress by Friday.

Among individual stocks, Centex ( CTX) was up $3.46, or 5%, at $15.73 late Thursday, while Toll Brothers ( TOL) was up $1.32, or 5%, at $26.67. Lennar ( LEN) was up $2.72, or 5%, at $62.22.

KB Home ( KBH) was up $3.50, or almost 7%, at $54.71, and Hovnanian ( HOV) was up $2.80, or 6%, at $47.93.

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