Toll Brothers Inc. is finding more buyers for jumbo loans, including a major insurance company, according to the luxury builder.
“We are seeing a lot more players in the jumbo market,” a company executive said Wednesday during a conference call on the company’s second-quarter results.
He noted that its subsidiary TBI Mortgage has started dealing with two REITs that it didn’t have a relationship with six months ago.
“We are in serious conversations with a major insurance company that is going to shift from buying MBS to buying loans directly from originators,” the executive said. “They love the Toll Brothers product,” he added.
In the second quarter ending in April, 1,753 homebuyers signed contracts to purchase a Toll Brothers home for an average price of $678,000, up from $585,000 a year ago.
Company executives told analysts that they have this “pricing power” because they control so much land and there is little competition in the luxury home market.
In the recent quarter, Toll Brothers raised its prices in 60% of its communities, which included 70% of its sales.