(Stock prices updated.)

WASHINGTON ( TheStreet) -- The housing market received two pieces of good news on Wednesday: median home prices grew in the second quarter and luxury home builder Toll Brothers ( TOL) saw an increase in signed contracts.

The news sent shares of homebuilders rallying in morning trading.

The National Association of Realtors said median U.S. home prices grew 4% in the second quarter to $174,100, and were up in 26 of the 155 metropolitan areas the group tracks.

But the median sale price was still 16% below last year's levels, and down in 129 of the metropolitan areas compared with last year.

Total sales rose to 4.76 million from 4.58 million, but were still about 3% below last year.

Separately, Toll Brothers said homebuyers who have signed contracts in the third quarter grew by 3%, its first year-over-year increase in four years.

Signed contracts soared 44% compared with the second quarter and only 9% of buyers backed out, the lowest cancellation rate in three years.

The company said it sold 792 homes, resulting in $461.3 million in revenue. Nonetheless, revenue was still down 42% due to declining home prices and fewer communities around the country.

"Although some of our markets are still stuck in the mud, many are improving," CEO Robert Toll said in a statement.

The company will release its final quarterly results on Aug. 27.

Shares of Toll Brothers jumped 14% to close at $23.42, Pulte Homes ( PHM) jumped 4% to $12.86, Centex ( CTX) grew 5% to end at $12.56, KB Home ( KBH) increased 3% to $18.28 and Lennar ( LEN) rose 4% to $13.52. -- Reported by Jeanine Poggi in New York.

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 This material may not be published, broadcast, rewritten, or redistributed.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

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