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Builders Hopeful About Next Two Years

The ranks of home builders expecting to boost both sales and their bottom lines in the near term are growing, according to a recent survey by Ernst & Young, LLP, which polled the CFOs and tax directors of more than two dozen major builders.

“The general consensus of the industry seems to be that while there are still challenges to face, the stage is set for expansion to resume sometime in the next 24 months,” said Steve Friedman, co-leader of Ernst & Young’s U.S. home building division.

Of those polled, nearly 85% anticipate that their companies will either break even or better this year—compared to 71% who said the same last year and 52% who made the same prediction in 2010. Nearly 95% made the hopeful prediction for 2013.

The expectations for boosted balance sheets come largely from forecasts for price improvements: 58% of respondents predicted that new-home prices will rise over the coming 24 months, and nearly 16% anticipated the gains would exceed 3%.

 

Thanks to Ernst & Young for this data