NEW YORK (CBS/AP) — A new report from the U.S. that showed Americans are snapping up homes at a pace not seen since the housing bust-fueled recession pushed the trading of shares of all companies affiliated with the sector into overdrive Tuesday.
The Commerce Department reported that new home sales jumped 16.6 percent last month to a seasonally adjusted rate of 619,000, up from a revised total of 531,000 in March. A mix of steady job gains and historically low mortgage rates are bringing more Americans back into a housing market even as rising prices put many properties out of range.
Sales of existing homes, which make up 90 percent of the housing market, rose in April for a second straight month to an annual pace of 5.45 million, a figure consistent with a solid economy.
That’s the highest level since January 2008, when the U.S. was teetering into the worst economic downturn since the Great Depression.
While there has been talk about the possibility of a second housing bubble bursting as it began to do in the U.S. in 2006, at least part of the reason prices are skyrocketing is a lack of supply. So many Americans were financially devastated by the recession, builders focused construction rental units in its aftermath.
With demand clearly burgeoning, that has begun to shift.
The U.S. reported last week that new home construction climbed 6.6 percent to a seasonally adjusted annual rate of 1.17 million units in April.
Ground breakings are running ahead of last year’s pace, largely because of a dramatic increase in the construction of single-family houses, especially in the Midwest and South.
Wall Street has taken note, and investors want a piece of any company that would be swept up in the nation’s housing acceleration.
Shares of homebuilder DR Horton rose 4 percent, while KB Home jumped 5.5 percent. Hovnanian Enterprises Inc. jumped more than 9 percent and Toll Brothers put up big quarterly numbers Tuesday, its shares rising 8 percent.
Home building suppliers Masco Corp. and American WoodMark Corp. rose 2.5 percent and 4 percent, respectively.
Newell Brands, which makes storage products and more for the home, and appliance-maker Whirlpool also gained ground.
Home Depot Inc. and Lowe’s both put up huge numbers for the first quarter recently and shares of both home supply retailers hit all-time highs this month.
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