NEW YORK (AP) -- Homebuilder stocks rose Tuesday as a survey showed that U.S. home prices climbed in July and two homebuilders posted better-than-expected quarterly profits.
Earlier in the day, the Standard &Poor's/Case-Shiller 20-city home price index reported that U.S. home prices climbed 12.4 percent in July compared with the prior-year period. This increase was due to a limited supply of available homes. It was the biggest uptick since February 2006, before the housing bubble burst.
Homebuilders were also buoyed by strong earnings from Lennar Corp. and KB Home. Lennar, a Miami-based builder which targets entry-level and move-up buyers, reported third-quarter earnings of 54 cents per share. Analysts surveyed by FactSet expected earnings of 45 cents per share, on average.
KB Home of Los Angeles posted earnings of 30 cents per share for its third quarter. This beat the 21 cents per share that Wall Street forecast.
Lennar's stock added $1.72, or 5 percent, to $36.26, while share of KB Home rose 77 cents, or 4.5 percent, to $17.80. The broader markets also were higher in midday trading.
Homebuilders are a bellwether for the housing market and the economy. While new homes represent less than one-fifth of the total housing market, construction of houses has a major impact on the economy.
Here's how some other homebuilders are faring in midday trading:
Beazer Homes USA Inc. climbed 30 cents to $18.21.
DR Horton Inc. gained 42 cents, or 2.1 percent, to $20.23.
Hovnanian Enterprises rose 11 cents, or 2.1 percent, to $5.29.
PulteGroup Inc. added 51 cents, or 3 percent, to $17.26.
Ryland Group Inc. climbed $2.39, or 6.1 percent, to $41.80.
Standard Pacific Corp. rose 20 cents, or 2.5 percent, to $8.10.
Toll Brothers Inc. gained $1.18, or 3.6 percent, to $33.80.