Pulte Homes' (PHM) agreement to snap up rival Centex Corp. (CTX) for about $1.3 billion in stock seems more like a one-off than a sign of things to come.

The bold move creates an industry titan with a market capitalization of $4.1 billion, knocking rivals D.R. Horton Inc. (DHI) and Lennar Corp. (LEN) off their perch. It also gives Pulte first pick of ailing competitors as it positions itself to survive long term.

"A lot of people have believed and have speculated that there was going to be consolidation in the space," said Richard Dugas, Michigan-based Pulte's president and chief executive. "It was just the right time."

Still, some experts say the news, which stunned the industry before the market opened Wednesday, won't revive mergers and acquisitions, which have essentially stalled as the worst economic downturn in decades drags on.

More deals would make sense as the industry struggles to survive. Builders have watched profits and their market caps crumble. The sector has slashed prices, offered more incentives and walked away from land, forcing charges of nearly $30 billion since early 2006, according to Moody's Investors Service. And, while there have been glimmers of hope that the nation's housing market is nearing bottom, builders face intense difficulty competing with a swelling count of bargain-priced foreclosures.

With lessons learned after gorging on overpriced land during the boom, builders seem more likely to pick up cheap land from the burned lenders. Indeed, most are hoarding cash, waiting to pounce as distressed lots hit the market.

"All of the builders are licking their chops, waiting for the opportunity to buy land for pennies on the dollar that will fuel their growth for the next cycle," said Rob Stevenson, an analyst with Fox-Pitt Kelton.

That's what made Wednesday's announcement all the more stunning.

"How aggressive are they going to be with buying land?" Stevenson asked, adding they're currently sitting on roughly 190,000 controlled lots, a steep supply given current conditions.

Still, this announcement combines two of the industry's strongest names, putting it among the top three in 25 of the nation's top 50 markets, including San Antonio, Phoenix and Sacramento.

The portfolio gives the powerhouse more balance, letting it better tap buying segments from active adults to first-timers, who are considered the best source of business right now - thanks, in part, to tax incentives designed to revive the market. And it will have plenty of cash to wait out the downturn - approximately $3.4 billion as of March. 31, compared with the $1 billion average for the top 13 builders.

By combining operations, which have significant geographical overlap, the companies can reduce significantly local overhead as a percentage of revenue, letting this new combination generate more cash than the firms would have solo, according to John Burns Real Estate Consulting.

Pulte also says joining forces leaves it poised to accelerate the return to profitability, which could leave other builders thinking of similar deals.

Indeed, the National Association of Home Builders trade group said it expects similar activity in the near future. Historically, mergers and acquisitions have "accelerated coming out of downturns, as more-liquid builders look to take advantage of strategic opportunities to build their market share," said UBS analyst David Goldberg. "We expect this trend to hold in this cycle, especially as smaller private builders look to exit the industry."

But others say this time could be different. This transaction is "the easiest deal that could happen," said Vicki Bryan, an analyst at Gimme Credit. "The other guys will have a lot more hair on their deal. They have serious issues with meeting covenants and they will have even more trouble as the market deteriorates over this year, and they all have to last another year."

Credit Suisse analyst Dan Oppenheim agreed, writing in an analyst note that similar transactions are less likely. "We see few other companies trading at a discount and being a willing seller at this time. Lower-quality balance sheet companies Beazer Homes USA (BZH), Hovnanian Enterprises (HOV), M/I Homes (MHO) and Meritage Homes Corp. (MTH) also have change-in-control provisions that would make a transaction much more difficult."

Bryan said that was a big factor. "Clever Pulte bought one of the few builders with no change-of-control provisions in its bonds, so it doesn't have to take out Centex's debt, which made this possible," he said. Wednesday's announcement includes $1.8 billion of debt.

That means gobbling up a private player isn't an easy workaround for publics looking to grow.

Private builders, which lack massive cash stockpiles, have experienced more turmoil than their public counterparts. The market has been crushed by tightened liquidity that has curtailed construction, said Russell Long, director of O'Keefe & Associates Consulting, a turnaround firm acting as court-appointed receiver for several failed residential projects in Michigan.

Private builders also typically have smaller footprints. "They're more localized and there'd be no reason to merge," he said. "They'd try to survive to see another day, but the private companies wouldn't have the synergies that made the Pulte and Centex deal work."

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