Shares of Irvine-based homebuilder Standard Pacific Corp. continued their run-up Wednesday on signs of a revived housing market.
Shares of Standard Pacific closed up nearly 8% on a market value of about $450 million.
The shares are up more than 300% for the year after being decimated in 2007 and 2008.
Standard Pacific rallied along with other builders on word this week of gains in the housing market.
On Wednesday, the Commerce Department said sales of new homes rose 9.6% in July from June to a 433,000 annual pace.
Economists had been forecast new home sales would rise to a 390,000 yearly rate, according to a Bloomberg survey.
Sales have been spurred by low prices, low mortgage rates and government incentives.
On Tuesday, homebuilders got another bit of good news as the S & P;/Case-Schiller index of home prices in the 20 largest housing markets rose 2.9% in the second quarter from the first.
Standard Pacific and others rallied on the news, despite a cautionary note from one analyst.
Robert Stevenson at Fox-Pitt Kelton Cochran Caronia Waller (USA) LLC predicted a September correction for homebuilder stocks, citing ongoing unemployment, foreclosures and the pending December expiration of a first-time home buyer’s tax credit.
Interest rates also are likely to rise with big government spending, Stevenson said in a research report.
“We believe the homebuilder stocks have overshot to the upside in the current rally,” he said.
