US homebuilders have had their biggest weekly gain since 1995 as investors and analysts say the market for new homes may have hit bottom.
A Standard & Poor's measure of 15 US builders rose 24 percent last week, Bloomberg News said.
It dropped one percent on Friday.
But Lennar Corp, Standard Pacific Corp, Pulte Homes Inc and M/I Homes Inc all gained.
The index rose after Raymond James & Associates raised its ratings on some companies amid expectations that US government action, including the Federal Reserve's interest rate cut last week, will boost demand for housing.
The gain in the builder index for the week tops the previous one-week record of 16 percent set in April 1999.
Lennar rose after Pali Research raised its rating on the shares.
"The sun is not shining very brightly, but at least the worst of the storm has likely passed," Pali analyst Stephen East wrote in his report on Lennar.
Lennar reported the biggest quarterly loss in its history last Thursday but bounced back gaining 4.8 percent on Friday after Pali raised its rating on the shares to "neutral" from "sell."
The Miami builder's fiscal fourth-quarter net loss was US$1.25 billion, or US$7.92 a share.
Revenue fell 49 percent to US$2.18 billion.
The company also recorded US$1.86 billion in expenses as the deteriorating housing market forced it to write down land and walk away from options on property.
"The government is now fully engaged in correcting the economic problems caused by housing and this can only help support the industry," East wrote. "Sharp interest rate cuts should take hold and boost homebuilder equities as they have done in the past."
Standard Pacific, which is based in California and sells houses in eight states, rose 15 cents, or five percent, to US$3.15. Pulte, which is based in Michigan and sells houses in 26 US states, rose 25 cents to US$13.10.
M/I Homes, a builder of homes in the US Midwest, Florida and the Mid-Atlantic states, rose 17 cents to US$12.99.
Negative sentiment among investors and home buyers may also be lifting, analysts said.
Former Fed Chairman Alan Greenspan said on Thursday that the US housing slump "may be close to the point where actual sales levels are starting to bottom."
Last Tuesday, the Fed cut its target overnight lending rate to 3.5 percent from 4.25 percent.
The reduction increased optimism mortgage rates would fall and help more people buy homes.
US law makers are poised to approve measures that may boost demand for housing.
An accord reached in Washington would temporarily raise the limit on the size of mortgages that federally chartered mortgage-finance companies can buy to US$729,750 from US$417,000.