NEW YORK (CNNMoney.com) -- Shares of major U.S. homebuilders rallied Friday, even as the broader market sputtered, after the government reported a surge in new home sales.
Hovnanian Enterprises (HOV) led the charge, with shares of the New Jersey-based builder up 10% at midday. Pulte Group (PHM, Fortune 500) and Lennar Corp. (LEN) both gained over 5%, while KB home (KBH) and D.R. Horton (DHI, Fortune 500) both rose about 3%.
Homebuilder stocks bucked the trend in the overall market, which struggled for direction in the afternoon as investors mulled a recent spate of upbeat corporate results and Greece's decision to accept an emergency financial aid package.
The rally came after the Census Bureau said sales of new homes in March spiked 26.9% from February sales, blowing away analyst expectations.
March sales were the strongest since last July, and the percentage gain was the biggest month-over-month gain in 47 years.
"Today's numbers threw everybody off," said Ryan Larson, a senior equity trader at RBC Global Asset Management. "It was a big jump."
While the surge in new home sales raised hopes that the housing market is regaining its footing, many analysts warned that sales could suffer after a popular homebuyer tax credit expires this month.
In November, the government extended and expanded an $8,000 tax credit, which also allows some repeat buyers to qualify for a $6,500 credit. Buyers have until April 30 to qualify.
But the outlook for the housing sector is mixed, Larson said. Investors will pay close attention to new and existing home sales data going forward to see if the current levels can be sustained, he added.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.80%||3.88%|
|15 yr fixed||3.20%||3.23%|
|30 yr refi||3.82%||3.93%|
|15 yr refi||3.20%||3.23%|
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