D.R. Horton and PulteGroup, the two biggest US homebuilders, said Thursday a tight supply of homes is helping them to raise prices, suggesting that the market is regaining strength ahead of the crucial spring selling season, according to Reuters. A dwindling number of existing homes for resale and a scarcity of ready-to-build land is allowing US homebuilders to hike their prices.
Home Builder Revenue: 1Q
D.R. Horton, out of Fort Worth, TX, reported Thursday that net home orders in 1Q totalled 8,569, up 8.8 per cent from 1Q 2013. Horton’s average community count last quarter was up 11 per cent from a year ago, according to Calculated Risk. The company’s sales cancellation rate, expressed as a per cent of gross orders, was 19 per cent, unchanged from a year ago. Home deliveries totalled 6,194 last quarter, up 13.4 per cent from the comparable quarter, at an average sales price of US$271,230, up 11.8 per cent from a year ago. The company’s order backlog at the end of March was 10,059, up 5.3 per cent from last March.
D.R. Horton’s revenue from home sales, excluding land sales, rose 22.7 per cent to US$1.68 billion. Net income rose to US$131 million, or 38 cents per share, from US$111.0 million, or 32 cents per share, a year earlier.
PulteGroup, based in Bloomfield Hills, MI, reported also Thursday that net home orders in 1Q 2014 totalled 4,863, down 6.5 per cent from the comparable quarter of 2013. The company said that absorptions per community were up from last year. Home deliveries last quarter totalled 3,436, down 10.4 per cent from the comparable quarter of 2013, at an average sales price of US$317,000, up 10.5 per cent from a year ago. The company’s order backlog at the end of March was 7,199, down 8 per cent from last March, said Calculated Risk.
PulteGroup’s net income dropped to US$74.8 million, or 19 cents per share, from US$81.8 million, or 21 cents per share, in the same quarter of 2013. Home sales revenue fell 1 per cent to US$1.09 billion.
D.R. Horton and PulteGroup reported a 10 per cent rise in average selling price for the first three months of the year.