NEW YORK (AP) -- Homebuilder stocks traded mixed Tuesday, despite commentary suggesting that a report showing a dip in U.S. sales of previously occupied homes in December reflects a limited supply, which could be positive for the sector.
The National Association of Realtors said sales fell in December to an annual rate of 4.94 million. That's down from a rate of 4.99 million in November, which was revised lower but was still the highest in three years.
But for all of 2012, total sales last year increased to 4.65 million, their highest level in five years. That's 9.2 percent higher than 2011 and the most since 2007. Sales finished below the roughly 5.5 million that are consistent with a healthy market. Still, most economists say home sales are improving steadily and that the gains should continue this year.
KeyBanc analyst Kenneth Zener said he thinks higher sales, along with higher housing starts and improved builder sentiment, reflect the drop in the amount of non-distressed housing on the market. He noted that the supply of new and existing homes has fallen 47 percent since the first quarter of 2006, while the supply of distressed homes has more than doubled.
"Builders' current order rates should continue to benefit from this constrained non-distressed inventory environment, though we expect tougher order comparisons in the first half of 2013," Zener wrote in a note to investors.
Shares of KB Home posted some of the sector's largest gains, adding 55 cents, or 3.3 percent, to $17.16, after peaking at $17.20 earlier in the session — coming within a dime of their 52-week high.
In addition, shares of Beazer Homes USA Inc. rose 43 cents, or 2.5 percent, to $17.67 and PulteGroup Inc. rose 5 cents to $20.54.
Meanwhile, NVR Inc. slipped $1.34 to $968.66, while Lennar Corp. gave up 5 cents to $42.03; DR Horton Inc. lost a penny to $21.51 and Hovnanian Enterprises Inc. edged down 7 cents to $6.23.