NEW YORK -- Pulte Homes Inc. is buying Centex Corp. for $1.3 billion in stock in a deal that will create the nation's largest homebuilder and could spark further consolidation in an industry that is suffering the worst real estate recession in a generation.

Centex is based in Dallas, Texas. The headquarters for Pulte is in Bloomfield Hills, Mich. A spokeswoman for Pulte said the headquarters for the combined companies would also be in Bloomfield Hills.

"This is where we've always been headquartered. This is where Bill (Pulte founder) built his first home in 1950 by (Detroit) City Airport," said Pulte Communications Manager Melanie Hearsch. "This is where our presence has always been. Bill's from this area and he's very committed that this is a Michigan company."

The transaction will combine Pulte's strength in active-adult and retirement housing with Centex's hefty market share of first-time homebuyers. The acquisition also will give Pulte large tracts of land in Texas and the Carolinas, two of the most resilient real estate markets, and a presence in 29 states and Washington, D.C.

The new company, which will also include the Del Webb, DiVosta and Fox & Jacobs brand homes, will require an unspecified number of job cuts.

According to Hearsch, the move is also expected to help suppliers linked to the home building industry and could eventually lead to workers in Dallas moving to the Detroit area.

"It allows us to not only survive, but thrive in any economic climate," said Richard Dugas Jr., Pulte's president and chief executive. Dugas will retain those titles over the combined enterprise.

Faced with a 75 percent slide in new home sales from the peak in mid-2005, home builders have slashed construction and prices but have been slow to join forces. Wednesday's deal touched off investors speculation that other homebuilders with battered stock prices may be easy targets.

This deal "is a game-changer, pure and simple," said Centex Chairman and Chief Executive Timothy Eller, who will become Pulte's vice chairman and will work as a consultant for two years after the acquisition is completed.

The combined company will have twice the revenue of its next largest rival, D.R. Horton Inc. Pulte and Centex pulled in a total of $11.61 billion in the last twelve months, compared to D.R. Horton's $5.82 billion.

Pulte stockholders will own about 68 percent of the combined business and Centex shareholders will own the remaining 32 percent.

Shares in both companies have lost more than half their value from their 52-week highs last year.