(Reuters) – Lennar Corp on Wednesday raised its full-year forecast for home deliveries, as the homebuilder benefits from upbeat demand that far outpaced supply.
Shares of the company were up nearly 3% at $118 aftermarket.
Homebuilders are benefiting from the lack of existing home inventory and pent up demand they were unable to meet in previous years.
Existing homes inventory remains 44% below pre-pandemic levels, according to data from the National Association of Realtors, resulting in price rises in some parts of the country, multiple offers and homes being sold above list price.
The perennial shortage of homes on the market is frustrating would-be buyers eager to take advantage of dips in mortgage rates.
The average rate on the popular 30-year fixed mortgage has been hovering in the middle of its 6.09% and 6.73% range this year, after peaking at 7.03% in late 2022, according to data from mortgage finance agency Freddie Mac.
“As consumers have come to accept a “new normal” range for interest rates, demand has accelerated, leaving the market to reconcile the chronic supply shortage derived from over a decade of production deficits,” said Stuart Miller, executive chairman at Lennar.
The Miami-based homebuilder raised its total home deliveries forecast for 2023 to 68,000 to 70,000 homes, up from its prior guidance of between 62,000 and 66,000 homes.
The company reported a second-quarter profit of $3.01 per share, above average analysts’ estimate of $2.32 per share, according to Refinitiv data.
Total revenue fell to $8.05 billion from $8.36 billion a year ago, but came in above analysts’ estimate of $7.18 billion.
(Reporting by Kannaki Deka in Bengaluru; Editing by Krishna Chandra Eluri)
