Pyrrhic Victory – New Leader Faces Challenges Galore

Regardless of who wins the side-show today, it will be a pyrrhic victory. If we have learned anything from this election cycle it’s the undeniable fact that America’s economic system is broken and that it no longer serves the interest of the general public. Decades of failed policies designed to keep a consumer-oriented, debt-based economy moving forward have masked a … Read More

Hovnanian Reports Q1 Results, Announces Exit From “Frothy” San Francisco Market

Hovnanian Enterprieses (HOV) reported 2016 fiscal first quarter results today, posting a 29 percent increase in revenues and a net loss of $16.2 million. That was just part of the story for Hovnanian Enterprises. The more important news is that Hovnanian said it has exited the markets of San Francisco, Minneapolis and Raleigh, with plans to wind down operations in … Read More

Census: New Home Sales Decline 5 Percent YoY In January To 494,000 (SAAR)

The Census new home sales report came in lighter than expected today. New Residential Sales In January 2016 posted at a seasonally adjusted annual rate (SAAR) of 494,000. This was well shy of analysts estimates of 520,000 and 5.2 percent lower than January 2015. The median price of a new home in January 2016 was $278,800, a $13,200 drop from … Read More

Toll Brothers Reports Fewer Deliveries, Lower Net Income In Q1 2016

Toll Brothers reported fiscal first quarter 2016 earnings this morning, and the results look like more stagnation for the luxury home builder. Deliveries were off 3 percent year-over-year while revenues climbed 9 percent on higher average prices. Toll saw signed contracts rise by 18 percent in the quarter, which is good considering that Toll’s community count rose only slightly from … Read More

Blind Optimism Leads To Malinvestment, Oil Glut, Collapsing Rig Counts

A recent report by Wood Mackenzie notes that cheap oil has barely made a dent in the global production of crude. Even though the price of oil has fallen like a rock, global oil production has barely budged. The problem of course is that many of the projects coming online were large projects with loads of sunk costs. And like … Read More

Stocks Suffer Worst Start To Year Ever, For U.S. Homebuilders It Was Even Worse!

New Home Sales

If you thought the 5.96 percent decline in the S&P stock index was an impressive start to the new year, the news for publicly traded homebuilders was even worse. Those rationally-minded people who actually bother to read charts and look at market fundamentals have been talking about the unraveling of the global money-printing charade (see China for example), but the … Read More

KB Home Q4 Earnings Lower Than Expected, Stock Hammered

KB Home reported fourth quarter earnings that were lighter than expected. KB’s net income of $44 million in Q4 2015 was lower than analyst estimates, but not a surprise given the margin compression experienced by many home builders recently. KB delivered 2580 homes in the fourth quarter, up 16 percent from a year ago. Average selling prices rose 8 percent … Read More

DR Horton Sees Higher Revenue And Home Orders In Fiscal Q4

D.R. Horton reported 2015¬†fiscal fourth quarter results this morning, and the Texas-based home builder bucked the trend of weak results from new home builders. D.R. Horton reported a 23 percent increase in closings for the quarter and a 19 percent increase in new orders. The company reported a 44 percent increase in net income for the quarter. Based on the … Read More