The reversal reflects “the expectation of continued profitability, as well as the improved housing market,” Miller said in the statement.
Lennar, which has reported a profit in every period since the second quarter of 2010, trades distressed real estate and notes through its Rialto Investments unit to supplement its homebuilding revenue.
Rialto had operating earnings of $4.3 million in the second quarter, down from $9.8 million a year earlier. The unit's revenue fell to $33.5 million from $42.6 million.
In another sign of a strengthening housing market, contracts to buy existing homes rose 5.9 percent in May from the previous month, matching a two-year high reached in March, the National Association of Realtors reported today. A shrinking supply will spur demand for more new houses, Lawrence Yun, the association's chief economist, said in a statement from Washington.
“If housing starts do not rise in a meaningful way over the next two years due to the difficulty in getting construction loans, and barring an unexpected shift in the economy, the steady shedding of inventory could lead to shortages where home prices could get bid up close to 10 percent in 2013,” Yun said.
Eoin Treacy's view Investor sentiment towards the housing sector has seldom been more bearish following a multi-year decline in prices, high unemployment, perceptions of a weak economic outlook and deleveraging in the banking sector. However, the performance of the home building sector suggests there is more to housing than meets the eye. (Also see Comment of the Day on June 7th).
Lennar Homes, Toll Brothers, Meritage Homes Corp, NVR, Pulte Group, D.R. Horton, M.D.C. Holdings, Ryland Group, Standard Pacific and M/I Homes found support in the region of the 200-day MA and/or the upper side of the underlying range in the last few weeks and continue to rally. Sustained moves below these lows would be required to check medium-term recovery potential. The high degree of commonality in the sector is an additional point in its favour.