LOS ANGELES — Toll Brothers Inc. on Wednesday posted a fiscal third-quarter profit, but the luxury homebuilder said fewer buyers signed contracts, another sign that housing and the broader economy are stumbling.
After an initial pickup in deposits and customer traffic in the first few weeks of May, buyer demand retreated and has remained essentially flat ever since, the company said.
Management blamed weak flagging consumer confidence, not a demand hangover from homebuyer tax credits that expired in April.
"It's continued to be very bumpy and relatively slow, and where we go from here, we don't know," said CEO Douglas Yearley. "Our buyers tend to be very tied to stock market, to world events, to their confidence. And right now they're on the sidelines."
Home sales revived this spring as affordable prices, low mortgage rates and two federal tax credits lured homebuyers into the market. But they stalled after the credits expired at the end of April.
New home sales dropped 12.4 percent in July to the slowest pace on records dating back to 1963, the Commerce Department said Wednesday. And the number of borrowers who applied for a purchase mortgage this week remains 41.5 percent below its April levels, the Mortgage Bankers Association reported.
Now a weakening economy, high unemployment, slow job growth and tight credit are sidelining buyers and many experts don't expect home sales to recover until the job market improves.
By ALEX VEIGA Associated Press August 25, 2010
Toll Brothers posts profit for 3rd quarter - Business - msnbc.com
Posts
