Lennar warns of hurricane-related delays to new-home deliveries
Lennar Corp., a homebuilder with 40% of its revenue concentrated in the Southeast and Texas, is warning of short-term delays in its deliveries of new homes from the hurricane-damaged regions.
Hurricane Harvey in Texas will likely affect 120 new-home orders in its fiscal third quarter ending Aug. 30, and 130 deliveries in its fiscal fourth quarter ending Nov. 30.
Early projections are that Hurricane Irma's effects on the Southeast will delay about 700 deliveries between the fiscal fourth quarter of 2017 into 2018.
"The expected shift of deliveries this year not only takes into account damage from the storm but also short-term labor challenges, power outages, potential delays in new-home utility connections and building department inspection and permitting delays," said Lennar CEO Stuart Miller in a press release.
The delay in delivery of homes comes on top of delays in loan closings that have occurred in storm-damaged areas. The developments are likely temporarily constrain purchase-mortgage volumes in these regions.
Lennar will update its projections earlier next month when it reports fiscal third-quarter earnings. It anticipates the hurricanes will ultimately generate new business once it is possible to start rebuilding in damaged areas.
"We expect that the rebuilding effort will result in increased economic activity and an increased demand for new homes, which will result in a broader spectrum of opportunity for us as we look towards 2018," Miller said. "Our company is well positioned with a strong land portfolio in these markets to fulfill the shortage of housing that has been exacerbated by these storms."