Shares of most U.S. homebuilders surged Wednesday after the government reported that developers began construction on homes last month at the fastest pace in more than five years.
The Commerce Department said builder broke ground on houses and apartments in November at a seasonally adjusted annual rate of 1.09 million. That's 23 percent more than October's pace of 889,000 and the fastest since February 2008, just a few months after the recession began.
Permits for future building slipped 3 percent to just over 1 million, down from 1.04 million in October. The drop reflected a decline in apartments, which can be volatile. Permits for single-family homes rose.
The data provided the latest evidence that the housing recovery is accelerating despite higher mortgage rates.
Mortgage rates peaked at 4.6 percent in August and have stabilized since September, when the Federal Reserve surprised markets by taking no action on starting to reduce its bond purchases. Its bond purchases are intended to keep long-term interest rates low, including mortgage rates.
The Fed ends a two-day policy meeting Wednesday, after which it will release a statement and projections for the economy. But most analysts expect the Fed will make no changes at this time to its bond-buying program. That should help keep mortgage interest rates low, ultimately benefiting homebuilders.
Builder shares also got a boost Wednesday from Lennar Corp.'s latest quarterly results, which trumped Wall Street's expectations.
The Miami company reported completed home sales jumped 27 percent in the September-November period versus a year earlier, while new home orders climbed 13 percent. Lennar also benefited from higher sales prices, which rose, on average, 18 percent during the quarter.
Lennar shares rose 95 cents, or 2.7 percent, to $36.15 in afternoon trading Wednesday.
Here's a look how the rest of the sector companies fared:
D.R. Horton Inc.: Up 49 cents, or 2.6 percent, to $19.40.
MDC Holdings Inc.: Up 37 cents, or 1.3 percent, to $29.23.
Meritage Homes Corp.: Up 60 cents, or 1.4 percent, to $43.16.
NVR Inc.: Up $16.47, or 1.7 percent, to $984.64.
PulteGroup Inc.: Up 20 cents, or 1.1 percent, to $18.22.
Ryland Group Inc.: Up 61 cents, or 1.6 percent, to $39.62.
Beazer Homes USA Inc.: Down 5 cents to $21.70.
KB Home: Up 19 cents, or 1.1 percent, to $17.21.
Taylor Morrison Home Corp.: Up 40 cents, or 2 percent, to $20.42.
Toll Brothers Inc.: Up 41 cents, or 1.2 percent, to $33.81.
Hovnanian Enterprises Inc.: Up 9 cents, or 1.6 percent, to $5.58.
Standard Pacific Corp.: Up 14 cents, or 1.7 percent, to $8.17.
M/I Homes Inc.: Up 59 cents, or 2.6 percent, to $22.94.
TRI Pointe Homes Inc.: Up 8 cents to $18.40.
UCP Inc.: Up 23 cents, or 1.6 percent, to $14.87.