The housing market appears ready to blossom this spring.
A U.S. report Tuesday showed that homebuilders ramped up construction in April to the fastest pace since the recession, hinting at a newfound momentum for an economy that has struggled in recent months. The Commerce Department report shows that housing starts last month increased 20.2 percent for the month, to an annual rate of 1.14 million homes.
Continue Reading Below
"The housing market comes back in the spring, is what realtors always say, and boy is this true today," said Christopher Rupkey, chief financial economist at MUFG Union Bank, in a note to clients.
The report helped lift shares in D.R. Horton, PulteGroup and other builders in trading Tuesday.
Home Depot, a home improvement retailer, also added to the optimism, reporting Tuesday that its first-quarter profit and revenue came in ahead of market forecasts as it capitalized on the momentum of the housing market recovery. It also raised its outlook for 2015, saying it was a stronger start to the year than it had anticipated.
The housing report was particularly welcome news after a less-than-optimistic assessment of builder sentiment on Monday. The National Association of Home Builders/Wells Fargo builder sentiment index slipped to 54 this month, down two points from 56 in April. Any reading above 50 signals expansion, yet the decrease suggested that builders still see would-be homebuyers as cautious.
The message has been mixed as the economy has entered into a unique predicament with hiring being solid, yet overall economic growth being feeble.
Here's a look at how some housing-related companies were faring in early afternoon trading:
DR Horton Inc. - Up 1.5 percent to $26.87
PulteGroup Inc. - Up 1.2 percent to $20.12
KB Home - Up 3.5 percent to $15.25
Lowe's Companies Inc. - Down less than 1 percent to $72.79
Home Depot Inc. - Down less than 1 percent to $113.53