NEW YORK (TheStreet) -- Sales of new single-family houses in the U.S. rose 5.7% in August, putting them at their highest rate since February 2008. In addition, the average conventional 30-year fixed-rate mortgage is 3.85%, according to the latest Primary Mortgage Market Survey from Freddie Mac (FMCC) . All of this is very good news for homebuilders, which have generally fared well during this market's correction, down about 5% in the third quarter, less than the 7% that the S&P 500 lost over the same period:

ITB Chart ITB data by YCharts

Although larger firms such as D.R. Horton (DHI - Get Report) and Lennar (LEN - Get Report) have posted solid numbers that have put them at least 20% above earnings estimates for the last quarter, there is one smaller company in their group that has been growing at a blistering rate. It's Texas-based LGI Homes (LGIH - Get Report) , and it's targeting first-time home buyers with simple, high-quality homes. By advertising to renters in the areas where LGI is building homes, it targets the perfect audience. It's also been making zero-down payment offers to potential buyers who qualify and offering low monthly mortgage payments to people who want to own homes.

The stock has more than doubled year-to-date: 

LGIH Chart LGIH data by YCharts

According to the company, home closings in July and August were 75% greater than last year and show no signs of slowing down. LGI is currently focused on Texas, Arizona, Florida and Georgia, with an eye toward expanding into other states. Since the company has a $500 million market cap, it is generally considered a small-cap stock, but it's one that is well worth further investigation by savvy investors.

This article is commentary by Mary Ellen McGonagle www.MEMinvestmentresearch.com. At the time of publication, the author held a position in LGIH.