What happened
Shares of home builder Taylor Morrison Home Corporation (TMHC -1.66%) popped higher on Wednesday after the company reported June was its best month ever. The company also announced a favorable new financing arrangement.
Taylor Morrison stock finished 17% higher for the day, and has now returned to where it started the year.
So what
Taylor Morrison sold 1,715 homes in June, for the all-time fast pace of 4.3 homes per day per community served by the company. That's up a whopping 94% from June 2019. Not only that, the value of its backlog was up 28% year over year. This was an accelerated growth pace from May, when the company's net sales were up 17% from last May.
For perspective, this is not an industrywide trend. Consider that net sales were up just 2% in the first three weeks of June for fellow home builder KB Home (KBH -1.68%). And Lennar Corporation (LEN -1.53%) saw its sales up 20% in the first half on June -- good, but still far behind Taylor Morrison's pace.
Perhaps it's these strong sales trends allowing Taylor Morrison favorable financing. The company intends to issue $400 million of unsecured senior notes, due in 2030. It will use this money, along with some cash at its disposal, to pay off notes due in 2023 and 2025 -- a smart long-term financing move.
Image source: Getty Images.
Now what
There's debate about where the housing market is headed in the near term. On one hand, there's a low supply of homes and historically low interest rates creating demand. On the other hand, unemployment is higher than it was just a few months ago. And if the coronavirus forces a second economic shutdown, unemployment could spike higher, likely hurting home sales.
For now, demand is still strong, and Taylor Morrison is taking advantage of it just as well as any other construction stock around.
