* D.R. Horton shares up 1.2 pct
* Homebuilder index up 1 pct vs flat S&P 500
* August starts up 10.5 pct, permits up 1.8 pct
(Adds analyst quote, updates share action)
NEW YORK, Sept 21 Shares of major U.S.
homebuilders rose on Tuesday on positive housing data,
extending a rally that started Monday after the third-biggest
builder, Lennar Corp (LEN.N), reported better-than-expected
On Tuesday, the Commerce Department said August's housing
starts increased more than expected to their highest level in
four months. Permits rose 1.8 percent from July.
For a graphic click: link.reuters.com/dej74p
Single-family starts, however, rose only 4.3 percent, while
single-family permits fell 1.2 percent.
That means starts will likely fall in September, according
to a research note from Credit Suisse analyst Dan Oppenheim who
warned of "less sanguine single-family details beneath the
Homebuilders on average were up 1 percent, according to the
Dow Jones U.S. Home Construction Index .DJUSHB, outpacing the
broader market as measured by the S&P 500 index, which was flat
to slightly down.
Shares of No. 1 homebuilder D.R. Horton Inc (DHI.N) were up
1.2 percent while shares of KB Home (KBH.N) were up 1.4
(Reporting by Helen Chernikoff, editing by Dave Zimmerman)