ConDig (24-Oct-17). New home sales in the US are set to grow 5-10% over last year’s levels amid strong demand, historically low interest rates and growth in first-time buyers entering the market, according to US homebuilder PulteGroup Inc.
The forecast comes as the Atlanta, Georgia-based US homebuilder posted a rise in third quarter net income of 38.2% to $177.5 million from $128.4 million in the same period last year.
Revenue jumped 9% from the year-ago period to $2.1 billion, driven by a 2% increase in deliveries to 5,151 homes. The average sales price increased 7%, or $25,000, to $399,000.
Net new orders for the third quarter rose 11% to 5,300 homes, while the value of new orders increased 23% over the prior year to $2.3 billion. Ending backlog for the quarter was up 15% over the prior year to 10,823 homes, as backlog value gained 26% to $4.7 billion.
“We continue to be extremely pleased with the strength of homebuyer demand and the sustained course of the housing recovery,” said Ryan Marshall, president and ceo of PulteGroup.
“Despite the disruptions caused by Hurricanes Harvey and Irma, our 11% increase in year-over-year orders for the quarter points to the health of the market, while the 15% increase in our backlog puts us in an excellent position to deliver strong fourth quarter and full-year financial results.”
US homebuilders are slowly becoming more bullish again, with latest figures showing that confidence rebounded in October to reach a 6-month high after sentiment in the market took a hit last month following the impact of two major hurricanes.
The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for newly-built single-family homes jumped up four points to 68 in October, its highest level since May.
Scores over 50 indicate that more builders view conditions as good rather than poor. The index stood at 63 in October last year.
Following the impact of Hurricane Harvey on the Houston area and Hurricane Irma across Florida, demand for homes has picked back up, along with work to repair the thousands of homes damaged by high winds and flooding.
Demand for homes in the US also continues to be underpinned by inventory shortages and a lack of skilled workers, while mortgage rates hold around near historic lows despite recent moves higher.