Homebuilders Are Finding Ways To Make Money Despite Depressed Housing Market

Wednesday, January 12, 2011 07:18
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Homebuilders Are Finding Ways To Make Money Despite Depressed Housing Market

Lennar Corp. became the second major homebuilder to report 2010 earnings that exceeded expectations despite continuing challenges in the home-building industry.

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The upbeat revenue report from Lennar followed a positive earnings report by KB Home last week, leading some analysts to predict an upward trend among homebuilder stocks for 2011.


However, the good news doesn’t necessarily point to any real resurgence in the home building industry, at least not right away. That’s because much of Lennar’s profits came from its financial services subsidiary, rather than any surge in actual home building, and some of KB Home’s earnings advances resulted from reductions in expenses.


Yet even if demand for new homes doesn’t stage a comeback in 2011, financial advisors should pay close attention to a depressed market segment whose major players are finding ways to boost revenues in spite of continued troubles in their core industry.
 

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