Shares of home builders rose Wednesday following news the Federal Reserve Board is moving to add liquidity to the housing market by raising the size of a lending program aimed at mortgage-backed securities by another $750 million.

Investors see the move as a way to help potentially thaw the current home lending freeze and boost sales.

The Dow Jones US Home Construction Index jumped 9.8% led by Hovnanian Enterprises, (HOV) whose shares are up 52% to $1.45. Beazer Homes USA (BZH) stock followed with a gain of nearly 27% to 95 cents.

"That could be very good news for us," said Brent Anderson, vice president of investor relations for Meritage Homes Corp. (MTH), whose shares jumped 16% to $13.39. "Lower rates translate to lower payments, which are what buyers are looking for today."

Home builders, struggling to survive the worst downturn in decades, have repeatedly asked the government for assistance lowering mortgage rates.

-By Dawn Wotapka, Dow Jones Newswires; 201-938-5248; dawn.wotapka@dowjones.com