The company also saw a surge in its shares
Luxury homebuilder Toll Brothers Inc. hit a record high on Wednesday, buoyed by a surge in demand and an optimistic outlook for the forthcoming selling season. Chief executive officer Doug Yearley articulated the company’s positivity, highlighting a substantial uptick in demand since mid-January during an earnings call.
Toll Brothers, renowned for its upscale residences, revised its expectations for home deliveries upward in the current fiscal year, according to a Bloomberg report. The announcement prompted a 6.1% surge in its shares, peaking at $109.61 by 10:09 a.m. on Wednesday, marking the most significant intraday increase since mid-December.
The housing market landscape has seen a paradigm shift, with buyers increasingly turning to builders amid a scarcity of listings for pre-owned homes. Toll Brothers, in particular, witnessed a staggering 40% surge in orders for the three months ending Jan. 31 compared to the same period a year earlier, reflecting the intensified demand.
Yearley shed light on the preferences of Toll’s clientele, noting a deviation from conventional mortgage rate buydown options favored by other builders. Instead, affluent Toll buyers are opting for alternative incentives, eschewing lower rates as prerequisites for mortgage eligibility.
Toll Brothers is also strategically transitioning from its customary build-to-order approach by diversifying its offerings to include more “spec” homes—homes that start construction before securing buyers. Notably, half of the recent quarter’s orders emanated from buyers who committed post-foundation construction. This shift, amid tight pre-existing home inventory, grants buyers the opportunity to acquire residences closer to completion while enabling customization of finishes based on construction progress.
“We are building spec across all of our price points, all of our product lines,” Yearley emphasized during the call.
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