THIS MORON AGAIN?!! DANIEL OPPENHEIM IS STEPHEN KIM II

KB Home, Pulte, MDC and Toll Brothers Rise on Upgrade, Analyst Says Home Prices Improving

NEW YORK (AP) -- Shares of four home builders rose in premarket electronic trading Tuesday after an upgrade from a Banc of America analyst, who said the stocks will rise because lower home prices will lead to increased demand.

Daniel Oppenheim upgraded shares of KB Home, MDC Holdings Inc. and Pulte Homes Inc. to "Buy" from "Neutral," and raised Toll Brothers Inc. stock to "Neutral" from "Sell." He said he thinks the stocks will rise by an average of 20 percent as demand for homes gradually rises through the rest of the year.

Oppenheim, who named KB Home and MDC as his top picks in the sector, said home sales have declined because prices were too high for buyers.

"Recent declines in mortgage rates and home prices have resulted in affordability levels better than the average from '91-'07," he said. He added that a decrease in construction will leave the home builders with lower inventory levels, and real estate agents are showing more homes, which means sales are going to rise.

KB Home shares rose 85 cents, or 3.3 percent, to $27.01 premarket. The stock finished at $26.16 Monday.

MDC shares advanced $1.90, or 4.2 percent, to $47.30 from its $45.40 close on Monday.

Shares of Pulte Homes picked up 76 cents, or 5 percent, to $16 after closing at $15.24 Monday.

Toll Brothers stock edged up 25 cents, or 1.1 percent, to $22.60 from its $22.35 Monday close.

All four stocks hit annual lows on Jan. 9, but each has rebounded more than 40 percent since then. Pulte Home shares, while still far off their 52-week high of $35.11, are up 85.9 percent.