Lennar managed to sell more homes at much higher prices in the latest quarter as demand outpaces supply. Fred Katayama reports.
More signs the housing recovery is steadily picking up. Lennar sold more homes at higher prices. The nation's second largest homebuilder was able to boost prices an average of 14 percent in the latest quarter as demand keeps outpacing supply. That helped pump up its homebuilding revenue 28 percent. The company admitted that the spring selling season was softer than it had expected. But with new orders rising 8 percent, it sees the recovery continuing at a "slow and steady pace" and says the industry's fundamentals "remain strong." Barclays analyst Stephen Kim said, "It was a solid operational quarter among lowered expectations," noting that "operating margins continued to improve." Lennar's results reflect the strong data that came out of Washington this week showing new home sales jumping to a six-year high in May. The economy wasn't all constructive for Lennar. A big drop in refinancing and a wider loss in its apartment rental business startup resulted in flat earnings. But investors cheered the results, sending Lennar's stock higher at the open, adding to its 5 percent gain this year. KB Home reports tomorrow.