U.S. second largest home builder Lennar Corporation (NYSE:LEN) announced its quarterly results with better-than-likely quarterly profit and revenue and said the housing market sustained to make a “slow and steady recovery.”
A much better job market condition and enticing mortgage rates hang on to fuel demand for housing in the United States, serving homebuilders such as Lennar Corporation (NYSE:LEN) and PulteGroup (PHM.N).
According to analysts America’s home prices will surge almost 5% next year, notwithstanding the outlook of several interest rate rises.
Even last week the U.S. Federal Reserve raised interest rates and indicated a quicker speed of rises in 2017.
Meanwhile Donald Trump’s promises of tax cuts, infrastructure spending and deregulation have elevated prospects that the economy is set for stronger growth.
“With the anticipation of a new President focusing on accelerating economic growth, we believe that our fortified balance sheet, our diversified business model and our refined product offerings, will continue to hold us in good stead in a high-growth economy, despite the potential of moderately rising interest rates over the next several years,” Chief Executive Stuart Miller said in a statement on Monday.
Furthermore the largest U.S. homebuilder D.R. Horton Inc (DHI.N), last month posted a 19.2% rise in fourth-quarter revenue, aided by higher home sales and prices, and said it projected its home sales for fiscal 2017 to go up 8-13 percent.
In the meantime orders, a key indicator of future revenue for homebuilders, surged 9% in the fourth quarter ended Nov. 30, Lennar said.
Moreover the Florida-based Lennar Corporation (NYSE:LEN), which mainly target buyers looking for a second home, sold 8,228 homes during the quarter, in contrast with 7,657 last year. The average sales price surged 2.6% to $358,000.