Zinger Key Points
- Lennar Corp reported earnings of $2.12 per share, beating the $1.55 consensus, on revenues of $6.49 billion.
- The company said it saw strong sales in the beginning of the year, when mortgage rates entered a brief downturn.
- Get New Picks of the Market's Top Stocks
Lennar Corp LEN shares are on the rise as the homebuilder's earnings outperformed expectations on both revenue and earnings per share. While this may be one factor driving the stock price, another catalyst could be the uptick in a separate homebuilder confidence indicator.
By The Numbers: The Miami-based company reported earnings of $2.12 per share, beating the $1.55 consensus, on revenues of $6.49 billion, ahead of the anticipated $5.93 billion, according to Benzinga Pro.
Lennar attributes its quarterly success to the mortgage rate relief experienced in January and early February, which reinvigorated sales.
See Also: Debunking The 'Good Old Days' Idea - Why Millennials Can't Afford A Home
At the same time, the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI) revealed a two-point increase in builder confidence for newly-built single-family homes in March, reaching 44. This marks the third consecutive month of rising builder sentiment.
Although recent financial system stress has lowered long-term interest rates, potentially boosting housing demand in the coming weeks, the cost and accessibility of housing inventory remain significant obstacles for potential home buyers.
The NAHB's March HMI survey found that 40% of builders cited poor lot availability.
In the previous month, 1.3 million new building permits were issued, with an equal number of new builds initiated and 1.4 million homes completed.
On Wednesday, the Census Bureau will release February's new residential construction numbers, and the market hopes to see improvements in starts and completions.
The HMI survey also highlighted that builders experienced higher-than-expected new home sales over the past two months, thanks to ongoing incentives and price discounts.
In March, 31% of builders reduced home prices, on par with February, but lower than November's 36%. Approximately 58% offered some form of incentive in March, similar to February's 57%, but down from December's 62%.
Price action: Shares of Lennar are trading 2.04% higher to $102.97, according to Benzinga Pro.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
