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Second Quarter Home Orders for Largest U.S. Builders Extremely Promising

by Houston Agent

The sun seems to be rising for the nation's largest homebuilders, which reported some promising stats yesterday.

By Peter Ricci

The National Association of Home Builders’ Builder Confidence Index hit its highest mark in five years in July, and based on second quarter home order stats from the nation’s largest builders, the source of such confidence is easy to spot.

Compiled by noted housing economist Tom Lawler and published on Calculated Risk, the data featured The Ryland Group, Pulte Group, M/I Homes and Meritage Homes, all reporting double-digit increases from from 2011’s second quarter.

The most promising data included:

  • For Ryland, the nation’s eighth largest builder, net home orders were up 32.9 percent year-over-year, while home deliveries were up 30.0 percent and average sale price up 3.3 percent.
  • For Pulte, the nations’s second largest builder, net home orders rose 32.1 percent from last year, and home deliveries and average sale price had respective increases of 5.0 percent and 8.1 percent.
  • For Meritage Homes, the nation’s 10th largest builder, net home orders increased an impressive 48.7 percent from 2011’s second quarter, while home deliveries were up 21.7 percent and average sale price up 5.0 percent.
  • Finally, for M/I Homes, the 16th largest homebuilder in the U.S., net home orders were up by 30.1 percent year-over-year, but even better, the sales cancellation rate was down 20 percent and average sale price was up 14.1 percent.

In his conclusion for the data, Calculated Risk’s Bill McBride pointed that all the aforementioned builders are publicly traded, and all have reported net orders above analysts consensus, lower cancellation rates and, best of all, increases in average sale prices and more competitive margins. It was McBride himself that called the housing bottom back in February, and if the stats mentioned above are any indicator, construction is well on its way to a recovery.

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