More Evidence of the Housing Bottom from the Builders

Includes: MHO, MTH, PHHMQ
by: Barry Ritholtz

Earlier this morning, we discussed some of the more hallucinogenic forecasts of the NAR (Home Prices Seen Rising in '07). As if on cue, a few more Home Builders show us what a bottom looks like (or not):

  • M/I Homes Inc. (NYSE:MHO) Thursday said new contracts for the quarter ended Dec. 31 fell 61% from a year earlier, to 353 homes. The Columbus, Ohio-based home builder said its cancellation rate rose to 63% in the fourth quarter from 27% in the year-ago period, and from 42% in the third quarter. More buyers have been backing out as prices fall and as they experience more difficulty selling their existing homes.
  • Meritage Homes Corp. (NYSE:MTH) said net orders fell 42%, cancellations hit a record high, and the company will take land-related writedowns in the fourth quarter as Meritage, like others in the sector, struggles with a crumbling housing market. The Scottsdale, Ariz., home builder reported net sales of 1,201 homes valued at $356 million, down from 2,072 orders valued at $723 million a year earlier. The weak sales were largely attributed to a surge in cancellations by jittery homebuyers worried about the volatile housing market. The company's cancellation rate soared to an all-time high of 48% of the company's gross orders in the quarter, up from 32% a year earlier.
  • Palm Harbor Homes Inc. (PHHM) warned it expects to post a loss in its fiscal third quarter ended Dec. 29. Chief Executive Larry Keener in a prepared statement said the manufactured-home industry "has continued to decline through the second half of calendar 2006, resulting in the weakest year for total factory-built housing shipments in history." The Dallas company said it projects unit shipments for factory-built housing for 2006 were 156,000 to 158,000 homes, about a 17% decline from the prior year.
  • I got your bottom right here.


    More Struggling Builders Warn Market Hasn't Turned Yet
    John Spence
    DOW JONES NEWSWIRES,January 11, 2007 12:50 p.m.

    Two more home builders say times are tough
    John Spence
    MarketWatch, 3:07 PM ET Jan 11, 2007