U.S. homebuilders are seeing revenue growth — and they have their lending businesses, not construction, to thank, Bloomberg News reported.
Both Lennar and Pulte Group, the first- and second-largest builders by market value, posted the largest overall profits since 2006 in the third quarter of this year, Bloomberg said — mostly due to growth in their lending arms.
Mortgage revenue at Pulte jumped 70 percent in the third quarter, outpacing the growth in sales six fold. At Lennar, mortgage-unit revenue surged 60 percent. But this may simply be a brief respite in the larger recovery, analysts told Bloomberg.
“Homebuilders are getting extra help right now from mortgages,” Jack Micenko, a homebuilding analyst at Susquehanna International Group, told Bloomberg. “They’re over- earning in those areas because lending margins are so wide, but they can’t depend on that going forward.” [Bloomberg News] –Guelda Voien