(Disclosure: Rose Law Group represents Lennar, Meritage Homes, Taylor Morrison and Toll Brothers.)
By Vincent Salandro | Builder
Public home builders weathered softer demand patterns due to mortgage rates and election uncertainty in the fiscal third quarter and delivered results that positioned many from significant growth in 2024.
The third quarter earnings season for public home builders was highlighted by strong community count growth, record revenue and quarterly closing numbers, and general optimism about the state of the new home market heading into 2025.
As the Federal Reserve enters a period of rate cuts, mortgage rates are expected to trend downwards, which could help activate both pent-up demand and resale inventory. However, several builders, including Taylor Morrison and Meritage Homes, noted their companies remain in strong positions to compete against the increased levels of resale supply in their operating markets. Rate buydowns are likely to remain a key element of the public home builder playbook moving forward and a competitive advantage for builders over existing home sellers.
The strong land positions and pipelines of public builders are continuing to allow public builders to achieve growth targets and scale operations. Many companies, including KB Home, LGI Homes, Beazer Homes, and Landsea Homes, reported significant year-over-year growth in community count during the fiscal quarter and are positioned to achieve double-digit growth on an annual basis in 2024.
