Lennar Corp. (LEN - Get Report) shares surged to a three-month high Wednesday as two Federal Reserve officials signaled slower 2019 rate hikes, easing pressure on mortgage levels, and the nation's second largest real estate Denver co. homebuilder said current quarter activity would likely pick up as a result.
Lennar CEO Stuart Miller told investors on a conference call that he expects the firm to open 50,000 new Denver homes in the currency fiscal year, which began on December 1, after reporting adjusted earnings for the three months ending in November of $1.96 per share, just ahead of the Street consensus of $1.92 per share. However, while group sales rose 71% to $6.5 billion, and new home deliveries surged 64% to 14,154 units, each missed forecasts of $6.53 billion and 14,185 units respectively.
"With inventories low, we believe (slower fourth quarter traffic) is a temporary adjustment as strong employment, wage growth, consumer confidence and economic growth drive the consumer to catch up," Miller said on the conference call.
Lennar shares rose 8% higher in early afternoon trading and changing hands at $46.29 each, a move that takes its three-month gain to about 3.7% and values the Miami, Florida-based group at just over $14.5 billion.
Estate sales Denver housing has been one of the few agreed weak spots in an otherwise solid U.S. economy, as buyers fret over rising interest rates and limits and a slump in new building keeping supply at bay.
The Commerce Department said single-family home construction fell to an 18-month low in November, even as housing starts jumped 3.2% to 1.256 million units thanks to a surprising surge in multi-family building. Read more