Pulte Homes Inventory Bulges, Housing Starts Up
In today's release of financial data Pulte Homes reveals they expect demand to remain high. Inventory surged almost $2 billion, up 33% from one year earlier.
When a firm as big as Pulte homes decides to increase or decrease inventory, it probably takes years to steer the numbers in the direction they want. I have no doubt that the home builders thought they were making the right move two or three years ago when they acquired lots of land and started dozens of subdivisions.
The slow motion effect will haunt the sector as it will take years to slow down the trend. The housing starts came in 5% higher than expected suggesting the industry is ignoring the signs of a slowdown.
2 Comments:
I had the exact same read of things, the fact that starts & permits came in above expectations shows that Wall Street expected the builders to be "smarter" and to start to ease up as demand is sure to fall in the future. Apparently they builders aren't reading the tea leaves the same as WS and could be headed for disaster. My guess is that we will see a SHARP decline in permits/starts sometime in the coming months once the builders realize their inventories are too high and WS punishes them for it.
BTW - I GREAT Blog, I read it every couple days or so.
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