Homebuilding company Lennar’s net earnings for the fourth quarter ended Nov. 30. came in at $3.91 per share, falling short of analysts’ expectations of $4.15 per share, according to Refinitiv data. COVID-19 pandemic-induced supply chain constraints led to higher lumber costs and delayed house deliveries. Total revenue rose to $8.43 billion, beating the Street expectations. Lennar's backlogs...

Homebuilding company Lennar Corp.’s fourth quarter delivery forecast is lower than analysts’ expectations, as supply chain challenges in the homebuilding industry weigh on outlook. "During the third quarter, our company and the homebuilding industry as a whole continued to experience unprecedented supply chain challenges which we believe will continue into the foreseeable future," Lennar...

D.R. Horton Inc. lowered its forecast for annual revenue and homes closed, on supply chain challenges such as shortages and delivery delays in building materials as well as a tight labor market. The homebuilding company now expects homes closed between 81,300 and 81,700, down from its prior forecast of 83,000 to 84,500 homes. It now projects its revenue for fiscal 2021 in the range of $27.4...

Its earnings topped estimates.

For the fiscal 2021 third quarter, ended July 31, the homebuilding company's revenue  came in at  $2.26 billion, up from $1.65 billion last year.Analysts expected  $1.54 a share.

On Tuesday, Toll Brothers and Equity Residential, a company focused on the acquisition, development and management of residential rental properties,  announced a strategic partnership to develop new rental apartment communities in key U.S. markets.

 

Homebuilding stocks like Lennar rose Tuesday, following a record year-over-year increase in S&P CoreLogic Case-Shiller Index in April,

The 10-City Composite rose +14.4% year-over-year in April, compared to  +12.9% in the previous month.All 20 cities reported sharper price increases in the year ending April compared with the year ending March.

Craig Lazzara, managing director and global head of index investment strategy at S&P DJI,indicated that the demand increase may reflect an acceleration of purchases that “would have occurred anyway over the next several years.

Shares of homebuilding company Lennar were upgraded to overweight from neutral at J.P. Morgan, following second-quarter earnings beat last week. The analysts at J.P. Morgan also boosted their price target on the shares to $141 a share from $115. According to the analysts, the stock is attractive relative to its peers, and effectively not reflecting the company’s “significant and ongoing”...

KB Home posted its fiscal-first-quarter revenue that grew from the year-ago period but fell short of analysts’ expectations. The homebuilding company’s earnings came in at $1.02 a share compared with 63 cents a share in the year-earlier quarter. Analysts polled by FactSet had expected 92 cents a share. Revenue climbed +6.1% year-over-year to $1.14 billion, shy of the $1.21 billion predicted...

Shares of the major home building stocks such as  Lennar, DR Horton and Toll Brothers, dropped more than -2% following the news.

New home sales dropped -11% month-over-month in November, according to the U.S. Census.

While mortgage rates fell rapidly in November, higher home prices could have weighed on affordability, thereby affecting contract signings.Strong home demand against limited inventory has been a prominent theme in U.S. housing market this year – something that has fueled price gains while apparently starting to challenge affordability.

The median price of a newly built home increased +2.2% year-over-year in November to $335,300.

One such homebuilder, Lennar, reported strong profits in Q4 as activity remained robust and as interest rates continue to anchor to record lows. 

The question for investors is, will this housing strength continue?A.I.dvisor has some insight, with the analysis below comparing Lennar Corp., PulteGroup, and Toll Brothers. 

 

he homebuilder reported higher profit in the fiscal fourth quarter as demand for homeownership remains elevated due to lower borrowing costs and the pandemic.According to our system of comparison, LEN is a better buy in the short-term than PHM and TOL.

“We are currently experiencing the strongest housing market I have seen in my 30 years at Toll Brothers, and we continue to increase prices in nearly all of our communities.”  --Douglas Yearley, CEO of Toll Brothers The pandemic and all of its associated restrictions have produced an unlikely boom in housing.In many cases, that has meant migrating out of major U.S. cities and relocating into more rural areas, where people can afford homes with office space.  According to Toll Brothers last earnings report, the number of contracts for new homes increased 68% to 3,407 units from last year, and the contract value rose 63% to $2.74 billion.

Homebuilding stocks have rallied sharply over the last eight months and the SPDR S&P Homebuilders ETF (XHB) has more than doubled.The fund fell below the $25 level in March and is now trading over $55. LGI Homes (LGIH) took part in the rally, rallying almost an exact $100 from its low of $33 to a high of $132.98.

On Thursday, PulteGroup  posted second-quarter earnings that beat analysts’ expectations. The home construction company’s second quarter earnings came in at an adjusted $1.15 a share, exceeding the 87 cents a share expected by analysts polled by FactSet. Revenue climbed +4.2% year-over-year to $2.59 billion, compared to $2.53 billion expected by analysts surveyed by FactSet. Home-sales revenue revealed a +6% increase in closings, to 5,937 homes.However, the increase was partly offset by a -3% decrease in average sales price to $416,000.  Net new orders fell -4% year over year to 6,522 homes with an average sales price of $410,000, down from $426,000 in the year-ago period. PulteGroup  said it paid down the $700 million it had borrowed as a precaution in March when the coronavirus pandemic broke out.  According to Tickeron, PHM in +4.95% Uptrend, advancing for three consecutive days on July 22, 2020 As a Bullish sign, keep an eye on this company's ticker

Industries such as software have actually benefitted as demand for products that help people work remotely have jumped.The industry experienced a terrible crisis from 2005 through 2011 as the global financial crisis hit. The financial crisis had much of its origins in the U.S. real estate market and that hit the housing industry hard.

The EPS was, however, down -32% from the year-ago quarter.  Revenue fell -3.1% year-over-year to $2.38 billion, but exceeded analysts’ estimate of $2.19 billion. Contracts were up +18% in units and 12% in dollars, for the fourth quarter. Chairman and Chief Executive Douglas Yearley Jr. emphasized that October housing starts were the strongest since July 2007, while the supply of homes on the market "remains constrained."   He also hinted at tailwinds from healthy consumer confidence and interest rates, and low unemployment rate. For the first fiscal quarter, Toll Brothers projects deliveries of 1,650 to 1,850 homes, with an average price in the range of $800,000 to $820,000.

On Wednesday, Lennar Corp. reported  third-quarter earnings that surpassed analysts' expectations. The home construction company’s earnings for the quarter came in at $1.59 a share, exceeding analysts’ estimate of $1.32 a share. Orders for new homes rose +7% to 14,469. Lennar indicated that it benefited from demand for new homes among consumers amidst lower mortgage rates, which in turn is a boost to homebuilding cash flow.

Home construction and real estate company Lennar’s fiscal second-quarter earnings edged past analysts’ expectations. Lennar reported earnings of $1.30 a share for the three months through May, compared to analysts’ estimates $1.15 a share. Revenue for the quarter increased +2% year-over-year to $5.2 billion. Home-purchase contracts in the quarter rose +1% from a year earlier to 14,518 homes.A decline in mortgage rates seems to be one of the factors to have bolstered Lennar’s profits.

Homebuilder DR Horton (NYSE: DHI) reported earnings on April 25.Now that the disappointment is starting to subside, the stock appears to be forming a base in the $44 area and looks as though it may be ready for another leg higher. Looking at the daily chart we see that the stock has been trending higher since the end of December and there is a trend line that connects the lows from December, January, and March.

The number of borrowers looking for a home loan fell to a one-month low, the Mortgage Bankers Association said. The Washington-based group’s seasonally adjusted measure on mortgage applications for home purchase and refinancing declined by 3.3% to 411.5 in the week ended May 24.This was the lowest level since the week of April 26.  “Concerns over European economic growth and ongoing uncertainty about a trade war with China were some of the main factors that kept mortgage rates low last week,” Joel Kan, MBA’s associate vice president of economic and industry forecasting, said in a statement.

Luxury homebuilder Toll Brothers (NYSE: TOL) is set to report earnings on May 22 and the stock just got a bullish signal from the Tickeron AI Trend Prediction Engine on May 17.Revenue has increased by an average rate of 19% annually over the last three years and it increased by 16% in the most recent quarter. The company shows a return on equity of 15.4% and a profit margin of 13.1% The weekly chart shows another possible long-term bullish signal and that is the fact that the 13-week moving average just crossed bullishly above the 52-week moving average.

U.S.home sales fell more than expected in March as rising demand stoked by declining mortgage rates and slowing house price inflation continued to be frustrated by a lack of properties, especially in the lower-priced segment of the market. Read more...