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The strength in the housing sector is reflected by the 3.8 percent gain currently being shown by the Philadelphia Housing Sector Index. The index is moving higher for the fourth consecutive session, although it remains off the ten-month high set earlier this month.

After seeing some early strength, housing stocks accelerated to the upside following the release of a report from the National Association of Realtors showing much stronger than expected existing home sales growth.

The report showed that existing home sales rose 7.2 percent to an annual rate of 5.24 million units in July from a 4.89 million-unit rate in June. Economists had been expecting a more modest increase to a 5.0 million-unit rate.

"The housing market has decisively turned for the better," said Lawrence Yun, NAR chief economist. "A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales."

NAR noted that the increase in sales was the largest monthly gain on record for the total existing-home sales series dating back to 1999. With the increase, existing home sales rose for the fourth consecutive month, the first four-month winning streak since June of 2004.

Existing home sales were also up 5.0 percent compared to the 4.99 million-unit rate seen in the same month last year, marking the first year-over-year growth since November of 2005.

Within the housing sector, M/I Homes (MHO) is turning in one of the best performances, with the homebuilder currently up 11.5 percent. At its high for the session, M/I Homes was at its best intraday level in over three months.

Ryland Group (RYL) Meritage Homes (MTH), and D.R. Horton (DHI) are also posting notable gains, advancing by more than 5 percent each.

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