Monday, September 21, 2015

Lawler on Lennar: Net Home Orders Up by “Decent” Amount Last Quarter, Houston Weak

by Bill McBride on 9/21/2015 07:36:00 PM

• At 9:00 AM ET, FHFA House Price Index for July 2015. This was originally a GSE only repeat sales, however there is also an expanded index. The consensus is for a 0.4% month-to-month increase for this index.

• 10:00 AM, Richmond Fed Survey of Manufacturing Activity for September.

From housing economist Tom Lawler: Lennar: Net Home Orders Up by “Decent” Amount Last Quarter, Though Weakness in Houston Limits Overall Gain

Lennar Corporation reported that net home orders in the quarter ended August 31, 2015 totaled 6,495, up 10.3% from the comparable quarter of 2014. Regionally the “soft spot” in home orders was in Houston, where net orders (606) were down 12.0% from a year ago. Home deliveries last quarter totaled 6,318, up 15.8% from the comparable quarter of 2014, at an average sales price of $350,000, up 5.1% from a year earlier. The company’s order backlog at the end of August was 8,250, up 13.2% from last August, at an average order price of $366,000, up7.6% from a year ago.

On the conference call officials mentioned labor “shortages” in some areas and noted that labor costs were up about 10% over the last year. They also noted that land costs in many of its markets were up by well more than that. Officials said that the company’s “first-time buyer” share had increased from about 25% a year ago to 30%, and that the company was focusing a little more on less expensive homes, via a combination of higher density (and more attached homes), fewer amenities, and smaller size.