Dive Brief:
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The nation’s 13th-largest home builder announced Wednesday it will build fewer homes this year than it predicted, saying its fiscal third-quarter sales are down 6% from this time last year.
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Horsham, PA-based Toll Brothers, a builder of luxury homes, will deliver a maximum of 5,500 homes in 2014—down from an earlier forecast of 5,850 units.
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Executive Chairman Bob Toll predicted the bottom lines of other big builders will reveal the same struggle. In a conference call with analysts Wednesday, he warned that the U.S. housing industry is headed for “choppy seas and a sloppy boat ride.”
Dive Insight:
The announcement reveals trouble in the high-end housing market, whose wealthy clients typically continue to invest in homes even after lower-income buyers back off. If that proves to be a trend, it could signal trouble for an overall housing recovery.