Chairman of national home builder Lennar, Stuart Miller, says that the recent drop in interest rates is bringing buyers back to the market.
In an interview with CNBC, Miller says, "The very quick moves in interest rates that we saw from the Fed that translated into the mortgage rates, it really created an element of sticker shock," adding, "With interest rates tapering back, we think we're seeing an elevation in consumer confidence and we think we'll see the customer come back to the market." Miller does not anticipate lower home prices for new homes with the current strength of the labor market, and with the high costs of land and skilled labor.
Lennar reported disappointing sales in the company's fourth quarter, ended Nov. 30. Profits beat expectations but revenue, deliveries and new orders came in slightly lower.
"I think that we're trying to find equilibrium right now. The customer is coming out to the market. With interest rates tapering back, I don't think you're going to see a big reduction in purchase price," said Miller. But builders are increasingly using incentives like granite countertops and higher-end finishing in new home sales, he added.
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