Boston, MA, 11/13/2013 (wallstreetpr) – After the U.S. largest homebuilder by revenue D.R. Horton, Inc. (NYSE:DHI) posted a strong quarterly data on Nov. 12, there is a resurgence of interest in homebuilder stock among investors. The housing industry has started showing recovery in recent times and home prices are also better than they were in the recent past. Increase in demand for homes and increase in home prices helped DHI post strong profit at $139.5 million or $0.40 per share. This compares to $100.1 million or $0.30 per share.
There is a tight supply of properties and this has increased demand so homebuilders are looking for good profits. A lot of U.S. homebuilders have sought to reducing cost so as to realize lifted net income. The U.S. Commerce Department is reporting that new home purchases have peaked 7.9% in August to an annual rate of 421,000. This is higher that what the rate was in the previous month.
There is room for home prices to soar higher than have been witnessed. This is so because interest rates are down and now builders are finding it easy to press buyers with higher prices. And coupled with cost reduction strategies, the prevailing real business environment should help builders recoup what they lost in the lag season.
In the most recent quarter, DHI realized $1.8 billion in revenue, a significant increase from $1.3 billion in the previous year. During the quarter, the Texas-based builder sold 6,866 homes against the 5,575 homes it sold in the same quarter last year. In the quarter, home prices went up about 15% to an average of $261,400.
Following the strong quarterly data, not only did the shares of DHI surge up significantly, but other builders such as Lennar Corporation, PulteGroup, Inc., Hovnanian Enterprises, Inc., KB Home (NYSE:KBH) and Toll Brothers Inc have also benefited from the good news as investors confidence in builders stocks increased.
