Toll Brothers CEO Doug Yearley told CNBC this week that the effects of dropping lumber prices will be seen in the second half of next year. He went on to add that he believes the low prices will stay low and dropping costs will help builders offset other cost increases. But the supply chain and labor issues facing the industry will continue to extend the time of home construction, and Yearley says that will continue for “a couple more” quarters. Lumber prices are now about $500, $300 less than this time last year.
“The tailwind of lumber coming down is very comforting,” Yearley told CNBC’s Jim Cramer, a day after the company reported better than expected fiscal third quarter earnings. “It’s going to help us. It’s going to drive some margin. But I think it’s going to offset some of the other cost increases that we’re feeling.”
“It’s taken us a little longer to build these houses. There are real supply chain issues. There’s labor issues,” Yearley said. “It took about two weeks longer in our third quarter to deliver a home. We expect that to continue for a couple more quarters as we manage through it.”
Shares of Toll Brothers rose more than 4% on Wednesday to $63.66 each. The stock is up more than 46% so far this year.