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New home sales give housing stocks a brief boost

The Associated Press

NEW YORK (AP) -- A jump in new-home sales gave housing stocks a short-lived boost Thursday.

The Commerce Department said that new-home sales reached an annual pace of 372,000 in July. That matched the sales rate in May, which was the highest since April 2010.

The news lifted housing stocks in morning trading, until they were pulled down along with the rest of the market.

The report on new home sales was the latest sign that the housing market is building strength. Sales have picked up, helped by record-low mortgage rates and relatively-affordable prices. House prices are roughly a third below their peak hit during the housing bubble in 2006.

The National Association of Realtors said Wednesday that previously-owned homes rose last month. Those sales have increased 10 percent in the past year.

Last month, builders responded by applying for the largest number of building permits in nearly four years, which analysts consider a hint of new construction to come.

One of those builders, Toll Brothers, said Wednesday that its net income soared 46 percent in the most recent quarter. The company's CEO said it's seeing the steadiest demand in more than five years. The news sent Toll Brothers' stock to a five-year high.

In Thursday trading, most housing stocks held up better than the overall market. Stock in Toll Brothers Inc. lost 21 cents to $32.80. Hovnanian Enterprises Inc. was down 2 cents to $2.59.

Shares of D.R. Horton Inc. were down 6 cents to $18.93. KB Home fell 2 cents to $10.72.