Toll Brothers shows profit in second quarter
The Horsham, Pa.-based luxury homebuilder Toll Brothers returned to a profit in the second quarter amid signs of strengthening home-building market.
The company posted a profit of $16.9 million in the quarter, compared to a loss of $20.8 million in the same quarter last year. Revenue rose 17% to $373.7 million.
Douglas C. Yearley, Jr., Toll Brothers’ chief executive officer, stated, “It appears that the housing market has moved into a new and stronger phase of recovery as we have experienced broad-based improvement across most of our regions over the past six months. The spring selling season has been the most robust and sustained since the downturn began. Even now, for the first three weeks of May, our non-binding reservation deposits, a leading indicator of future contracts, are running 39% ahead on a gross basis, and 23% ahead on a per-community basis, compared to last year’s same May period.”
The builders’ home deliveries increased to 671 units, up from 591 units. Net signed contracts increased to 1,290 units, up from 879. And Backlog rose to 2,403 units, from 1,760.
“Operating performance and new order growth (+46.8% y/y) were materially ahead of expectations and attest to the strength of the spring selling season which is the best in the last five years,” according to a research note from RBC Capital Markets analyst Robert Wetenhall.
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Material honors for Perennial Wood
Perennial Wood received honorable mention for a MEDIUM Award for Material of the Year from Material ConneXion.
The award recognizes materials that demonstrate outstanding technological innovation and the potential to make a significant contribution to the advancement of design, industry, society and the economy.
Perennial Wood, described as real wood modified to endure nature’s harshest elements, received the award at the International Contemporary Furniture Fair in New York City.
“We are honored to be selected among the best new materials by Material ConneXion, experts in material science and specifications,” said Deborah Baum Crain, director of innovation projects for Perennial Wood. “Now more than ever, manufacturers are looking to incorporate longer-lasting, high-quality and sustainable materials into their products. For outdoor applications, whether furniture, windows, doors, siding or trim, Perennial Wood offers manufacturers a practical alternative to composite, plastic and tropical hardwood materials.”
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Freddie Mac: Housing market showing recovery
First-quarter economic data from the office of the chief economist at Freddie Mac showed a 2.2% growth rate, slower than the previous quarter, but better than three of the past four quarters. The slower growth primarily reflected less housing inventory accumulation and a dip in nonresidential construction. Personal consumption expenditures grew at a 15.3% annual rate, reflecting continuing strength in consumer durables (such as cars and kitchen appliances). Also, residential fixed investment (RFI) added 0.4 percentage points to the quarter’s economic growth.
RFI, which primarily reflects new housing construction and remodeling expenses, has been a net positive contributor to growth for four straight quarters, with the latest quarter providing the biggest boost in nearly two years. Multi-family rental-apartment starts and existing-home remodeling have triggered the RFI growth. Housing starts were up in April, and have brought the monthly average over the first four months of 2012 to 713,500, up 24 from the same period a year ago. Nonetheless, RFI remains weak for this stage of the economic recovery compared with previous business cycles.
The Freddie Mac House Price Index (FMHPI) for the first three months of this year suggested that home values may be at or near their bottom in many markets. Comparing March 2012 with December 2011 results at the state level, the index was up at least 0.5% in 13 states, and about flat (plus or minus 0.5% in nine states, but down at least 0.5% in 28 states. With the lowest fixed-rate mortgage rates in more than 60 years, the extraordinary home-buyer affordability in many areas should translate into a sales pickup in 2012 relative to last year.
Despite some signs that the housing market may have bottomed, homeownership rates have continued to move lower through the first quarter. The U.S. Census Bureau reported that the national ownership rate dropped 0.5 percentage points to 65.5% (seasonally adjusted) during the quarter, down from a peak of 69.4% in the second quarter of 2004 and back to a level last seen in 1997. Some additional slippage in the homeowner rate is likely as more than 2 million homes remain in foreclosure proceedings nationwide.
In the same release, Census also reported that vacancy rates for both for-rent and for-sale homes declined further in the first quarter — signs that the rental market continues to tighten and that excess vacant homes are being absorbed by household formations. Homeowner vacancy rates in one-family houses dipped to their lowest rate in six years, and rental vacancy rates for one-family houses fell to their lowest in almost nine years.
Another important first-quarter metric concerned the refinance boom. Although this may not be good news for home improvement retailers, homeowners who refinance are typically not using the opportunity to embark on home renovation projects. Freddie Mac’s first-quarter refinance activity reports found that about four of five borrowers who refinanced their mortgages either paid down their balance or kept it about the same. Further, more than 95% of refinancers in the conforming market chose fixed-rate loans, and about one in three shortened their term from 30 years to 20 or 15 years on their new loan.
“Taken together,” the report concluded, “the first-quarter data releases provide an encouraging sign for both the macroeconomy and the housing recovery. While not uniformly positive, for the most part, the data trend in the right direction.”
This is not going on across
This is not going on across the country. You are just like the white house spreading the wrong message. The housing industry still has thousands of homes upside down, so why lie to the general public???