Beazer Reports 56 Percent Drop in New Home Orders
Beazer Homes USA, Inc. (BZH) said Tuesday morning that new home orders at the home builder fell 56 percent in its fiscal first quarter, ended Dec. 31; the company received orders totaling 551 for the quarter, down from 1,252 net orders in the year-ago period, according to a company statement. The woes at the large Atlanta-based builder underscore the dire industry conditions for most new home builders, as the nation's credit and housing crisis lurches forward through an extended period of correction. Beazer said orders fell more sharply in markets it had decided to exit, not suprisingly, although net orders still fell 48.9 percent in markets the company maintains a presence in. Closings fell 53.2 percent to 938, from 2,006 homes closed during the same period in the prior fiscal year, Beazer said. The only potentially good news in the update from Beazer is that its cancellation rate had eased somewhat: the number of borrowers backing out of an initial sales contract -- ostensibly because financing is hard to come by, among other issues -- fell to 45.6 percent, compared to 46.6 percent for the same period in the prior year. Beazer said it held cash and cash equivalents of $436.9 million at the end of Dec., down from $584.3 million at the end of Sept. Fitch Ratings said in a Dec. 16 report that it expects many of the nation's home builders to remain under pressure throughout all of 2009, as the effects of mounting job losses and recession are felt. Write to Paul Jackson at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.