Interest Rate Roundup

Wednesday, March 07, 2007

Toll Brothers sings a happy tune on housing ... while D.R. Horton says business will "suck"

Lots of comments are coming out of the major public builders right now, given the host of investment conferences going on. On the upbeat side, luxury builder Toll Brothers claimed that it would "burn off" its excess inventory in the next few months provided cancellation rates continue to moderate.

On the ... er ... slightly more negative side, D.R. Horton just said business would "suck" this year. The quote, from Bloomberg:

"I don't want to be too sophisticated here, but 2007 is going to suck, all 12 months of the calendar year,'' D.R. Horton Inc. CEO Donald Tomnitz said. "Our future is not as bright as what we would like it to be.''

It's worth noting that Toll has been somewhat inconsistent in its market forecasting, to say the least. As Bloomberg puts it ...

"After predicting that the home market was nearing a ``bottom'' in December, Toll last month reversed course as deposits failed to live up to expectations. Today, he tempered his comments by saying the market 'is still beset by speculation'' and that it may take longer in some areas to pare the number of unsold properties."

Personally, I think Horton is on the money -- the housing market will kind of suck this year for all the reasons I've spelled out on my blog.


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