But if I knew how to manage my portfolio safer and smarter than most hedge fund managers, I could realistically grow my wealth.
Background on D.R. Horton
Through its Main Street Stars program, D.R. Horton offers special incentives or options on new homes to people who operate in a public-service capacity.
The first-time homebuyer accounts for 40% of D.R. Horton’s sales, which is in line with historical norms. Starter homes have lower margins than McMansions.
Beating Wall Street expectations, D.R. Horton reported 1Q15 revenues of $2.3 billion—a 35% year-over-year increase and a sequential decrease of about 7%.
We have underbuilt for a long time, and even in lousy economies people still get married, have kids, and ditch the roommates.
Most people didn’t believe the declines early in the bear market, so we shouldn’t be surprised that people don’t believe we’re in a bull market for homes.
Most economists are forecasting housing starts to be around 1.1–1.2 million, an increase from last year, but still below the normalcy of 1.5 million.
States like California dealt with the pipeline years ago. This explains why prices are rising in California real estate but are stagnant in the Northeast.
In November, home prices grew 0.8% month-over-month. They’re up 5.3% year-over-year. Prices are now within 4.5% of their April 2007 peak.
Investors, realtors, and homebuilders watch foreclosure starts closely. Foreclosure starts forecast future housing supply.
Industrial production decreased 0.1% in December, compared to a 1.3% increase in November. Materials and construction supplies increased by a lot.
Sales fell 0.2% in November. Inventories increased 0.2%. Interestingly, the inventory build was with the retailers, not the manufacturers.
Construction supplies increased 1.4% in December, a standout number. This might portend a more vibrant building season in 2015.
The General Business Conditions Index shows that Empire state manufacturing has rebounded. Of those surveyed, 33% reported better conditions.
Mortgage rates have lagged the ten-year bond lately, as mortgage bankers have been reluctant to believe these lower rates are permanent.
The Mortgage Bankers Association (or MBA) Purchase Index increased 23.6% in the week ended January 9 as global bond markets rallied.
Lennar Corporation (LEN) is a homebuilder with a primary geographical focus on the Southeast, South, Southwest, and Northwest.
Lennar reported net earnings of $245.3 million, or $1.07 a share, compared to net income of $164.1 million, or $0.73 a share, a year ago.
For the fourth quarter, gross margins increased 40 basis points sequentially, to 25.6%. Last year, however, fourth quarter gross margins were 26.6%.
For the fourth quarter, Lennar reported $2.6 billion in revenue. This is an increase of 35% year-over-year.
KB Home (KBH) believes in sustainability. The company has taken the lead in developing energy-efficient homes.