The housing market was given a break from downbeat news on Thursday, after two of the nation's largest homebuilders, DR Horton (NYSE:DHI) and PulteGroup (NYSE:PHM), reported earnings for the three months ended March 31.
To say it's been rough going of late for the still-fragile housing recovery would be an understatement. Both new and existing home sales plummeted in March. Mortgage applications and originations are at decades lows. And the inventory of listed homes for sale remains anemic -- click here to see the nine statistics that expert homebuyers follow.
It's for these reasons that the latest figures from DR Horton and PulteGroup are such a welcome relief. DR Horton's performance was particularly impressive, as the nation's biggest builder logged an 8.8% increase in net new sales orders compared to the same period last year. The same figure fell for PulteGroup by 6.5%. However, it's operating with 10% fewer communities than it did at this time last year. The net result is that both companies reported double-digit year-over-year increases in net income.
Perhaps most encouraging was the upbeat tone from the builders' executives. "Housing market conditions remain favorable," said Donald R. Horton, CEO of DR Horton. His counterpart at PulteGroup echoed this optimism. "We continue to believe housing is in the early stages of a multiyear recovery benefiting from low interest rates, low inventory and continued relative affordability of homes, and with consumers looking for well-located houses and displaying a clear willingness to invest in those features they value most," said Richard J. Dugas.
Does this mean the housing market is in the clear? While this is obviously a premature conclusion, these results certainly offer a reason to hope that the spring selling season will turn out better than otherwise expected.