Homebuilders' Losses Mount Amid Low Orders
Two of the country’s largest home-building corporations lost millions in Q209 and said challenges remain amid low buyer demand for new homes. Bloomfield Hills, Mich.-based Pulte Homes (PHM) lost $189.5m ($0.74 per share), an even greater loss than the $158.4m Pulte reported in Q208. The country’s largest builder, Fort Worth-based DR Horton (DHI), lost $142.3m ($0.45 per share) in the quarter. That’s an improvement over Q208’s loss of just under $400m. “Market conditions in the homebuilding industry are still challenging, characterized by rising foreclosures, high inventory levels of available homes, increasing unemployment, tight credit for homebuyers and weak consumer confidence,” DR Horton board chairman Donald Horton said in a statement. Horton and Pulte both reported decreased orders for new homes of 7.5% and 34.5%, respectively. Pulte reported selling 54% fewer homes (2,500) at a decreased average selling price $261,000, while Horton sold 45% fewer homes in Q209 (4,240) than in Q208. Dallas-based Centex Corporation (CTX) — a builder currently negotiating its $1.3bn takeover by Pulte — stayed in the black thanks to a $410m tax credit that helped the company earn $85m in Q209. Write to Austin Kilgore.