Shares of homebuilders climbed Wednesday after reports showed an uptick in home construction and mortgage application volume.
Construction of new homes and apartments rose 8.9 percent in November to a seasonally adjusted annual rate of 574,000 units, the Commerce Department said. The gain represented strength in all areas of the country, though the rise was slightly lower than economists had expected.
Applications for new building permits rose 6 percent to an annual rate of 584,000 units, a stronger showing than predicted.
Meanwhile, mortgage application volume inched up 0.3 percent last week, the Mortgage Bankers Association said Wednesday.
With interest rates still hovering near historical lows, homeowners are looking to lock in lower monthly payments. The average interest rate on a 30-year, fixed-rate mortgage rose to 4.92 percent last week from 4.88 percent a week earlier. It was the second straight week rates increased.
The survey by the trade association provides a snapshot of mortgage lending activity among mortgage bankers, commercial banks and thrifts. It covers more than 50 percent of all residential retail mortgage originations each week.
Shares of homebuilders were higher in afternoon trading. Hovnanian Enterprises Inc. gained 43 cents, or 11.4 percent, to $4.23; Lennar Corp.'s stock rose 66 cents, or 5.5 percent, to $12.71; Meritage Homes Corp. added 94 cents, or 5.9 percent, to $16.97; Ryland Group Inc. gained 53 cents, or 2.9 percent, to $18.60; and shares of MDC Holdings Inc. advanced 97 cents, or 3.4 percent, to $29.72.
Pulte Homes Inc. climbed 49 cents, or 5.5 percent, to $9.38 and KB Home's shares rose 86 cents, or 6.7 percent, to $13.68. Toll Brothers Inc. edged up 57 cents, or 3.2 percent, to $18.47, while DR Horton Inc. rose 46 cents, or 4.7 percent, to $10.27.