Thursday, February 04, 2016

Lawler: Home Builder Results: Net Orders Decent, Deliveries Lag a Bit, Order Backlog Jumps

by Bill McBride on 2/04/2016 12:38:00 PM

From housing economist Tom Lawler:

Below is a table showing some selected operating statistics from large, publicly-traded home builders for the quarter ending December 31, 2015.

Combined net home orders for these seven home builders last quarter were up 11.7% from the comparable quarter of 2014, while home deliveries were up 6.3% YOY. For the group as a whole deliveries were a bit lower (as were revenues and earnings) than one would have expected based on order backlogs, which mainly reflected longer-than-normal construction timelines in several markets (as opposed to sales cancellations, which in aggregate were down slightly from a year ago). The combined order backlog for these builders at the end of last year was up 18.3% from a year earlier. Net orders per active community for the group were up 8.7% YOY.

  Net OrdersSettlementsAverage Closing
 Price ($000s)
Qtr. Ended:12/1512/14% Chg12/1512/14% Chg12/1512/14% Chg
D.R. Horton8,0647,3709.4%8,0617,9731.1%2902813.3%
PulteGroup3,6593,23213.2%5,6625,3166.5%3533345.7%
NVR3,1002,71314.3%4,0103,46915.6%3823761.6%
Beazer Homes923966-4.5%1,04988518.5%3212968.6%
Meritage Homes1,5681,27223.3%1,9191,8633.0%3973697.6%
MDC Holdings1,02088715.0%1,2751,2422.7%4353979.5%
M/I Homes89777316.0%1,2531,10513.4%36032211.8%
Total19,23117,21311.7%23,22921,8536.3%3433265.4%


D.R. Horton reported that net orders for its “Express” brand, targeted for the “entry-level” home buyer, represented 25% of its total orders (in units) last quarter, compared to 13% in the comparable quarter of 2014, while the Express share of deliveries increased to 22% from 10%. The average selling price for Express deliveries last quarter was $199,400, compared to $168,900 a year earlier. A major reason for the sharp jump in the average Express selling price was an increase in the share of deliveries in higher-priced markets (including California).

While LGI Homes has not yet released its earnings report for last quarter, the company does release monthly home closings (in units). For the quarter ended December 31, 2015 LGI Home delivered 946 homes, up 45.1% from the comparable quarter of 2014. LGI had 54 active communities in December, up from 39 a year earlier. LGI focuses heavily (though not exclusively) on entry-level/first-time home buyers, and its average sales price in the quarter ended September 30, 2015 was about $186,000. LGI also reported that its home closings totaled 232 in January, up 51.6% from the previous January, and that it had 54 active communities in January compared to 42 a year ago.

Earlier this month the Commerce Department estimated that new single-family home sales last quarter totaled 112,000, up 7.7% from the comparable quarter of 2014.