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Home Builder CFOs Report Strong Q2 Gains Despite Inflationary Pressures

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Home Builder CFOs Report Strong Q2 Gains Despite Inflationary Pressures

Homebuilder CFOs are facing persistent headwinds from inflated material and labor costs, lingering supply chain challenges, and a more hesitant consumer base

September 9, 2022
'New homes' flags on empty plot in residential development
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Home builder CFOs adjusted to a more cautious buyer pool in the second quarter of 2022 following the sixth consecutive month of declining home sales, CFO Dive reports. As inflationary pressures pose extended challenges for would-be buyers, the inventory of unsold homes has risen to 1.3 million, but major home builders such as Lennar are finding ways to forge ahead.

The company’s revenue from home sales rose 33% during the second quarter to reach $8 billion, compared with the $6 billion tallied in the second quarter of 2021. While Lennar anticipates more gains in Q3 2022, CFO Diane Bessette is also wary of a slowing market in the months ahead.

Financial executives in the residential real estate space are feeling the pressure — home construction company Lennar Corporation Chairman Stuart Miller noted the company recognizes “inflation continues to be a legitimate threat” during the firm’s Jun. 21 second quarter earnings call.

The uncertain market conditions also made it difficult to provide more targeted guidance for the coming year, CFO Diane Bessette said on the call, though the company expects average sales prices for the third quarter to be slightly above averages for its second quarter — an average of $483,000, she said.

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