Lennar reported fiscal fourth-quarter earnings that beat analysts’ estimates as revenue jumped 42 percent and profit margins climbed.
Cheaper borrowing costs are attracting home buyers who have adequate credit. The average rate on a 30-year fixed purchase loan was 3.40% in the week ended Jan. 10, compared to 3.89% a year ago, according to McLean, Virginia-based Freddie Mac.
Lenders such as San Francisco-based Wells Fargo & Co. are benefitting from an increase in homebuyer traffic as the housing market that triggered the recession is showing further signs of healing.
“The housing market began a steady rebound during 2012,” Chief Executive Officer John Stumpf said on a Jan. 11 conference call. “While many measures of activity and prices remain low by historical standards and a complete recovery will still take some time, there is no doubt that a corner was turned.”
Residential fixed investment climbed almost 14% in the third quarter from a year earlier to $370.9 billion, its highest level since the end of 2008, the Commerce Department reported Dec. 20. The broader U.S. economy expanded at an annual pace of 3.1% in the three months to September. Gross domestic product will increase 2% this year, based on the median of 96 estimates in a Bloomberg survey.