6 homebuilders make 2017 Fortune 500
D.R. Horton led a group of six U.S. homebuilders on Fortune’s annual list of the 500-largest companies in the country by revenue, taking the No. 232 spot. Lennar (No. 260), PulteGroup (No. 353), CalAtlantic (No. 415), NVR (No. 446) and Toll Brothers (No. 497) rounded out the builder representation on the list.
All six builders moved up in the ranking, jumping between 28 spots (D.R. Horton) and 225 (Cal Atlantic). Combined, the six builders posted $48.3 billion in revenues in 2016.
Joining those builders on Fortune’s list was Dallas-based Builders FirstSource. The material supplier made its Fortune 500 debut in the No. 421 spot with 2016 revenues of $6.4 billion.
Continued recovery in the housing market and strong price growth nationwide drove homebuilders’ strong performance in this year’s Fortune 500. Home prices in March were 1.3% ahead of the 2006 peak, according to the latest S&P CoreLogic Case-Shiller U.S. National Home Price Index, the 33rd-consecutive month of increases.
Fortune’s list jives, for the most part, with one kept by Builder magazine, which ranks the nation’s top builders by closings. In 2016, D.R. Horton led with 41,652 closings, followed by Lennar (26,563) and Pulte (19,951). While CalAtlantic beat NVR in 2016 revenues, NVR closed more homes (14,928) in 2016 than did CalAtlantic (14,229), according to Builder. Toll Brothers closed fewer homes last year (6,098) as compared to KB Home (9,829), Taylor Morrison (7,369), Meritage Homes (7,355) and Hovnanian Enterprises (6,687), according to Builder, but the Pennsylvania-based company pulled in more revenue due, in large part, to its focus on the luxury market.
Many of these builders are turning their eye toward the entry-level segment, as well as showing the desire to add more trade-up inventory.
In a call with analysts, D.R. Horton said its average Q2 2017 closing price was $295,600, up 2% year-over-year, with entry-level homes under its Express Home brand accounting for 29% of closings and 22% of home-sales revenue during the period.
For Lennar, average Q1 selling price was $365,000. Its acquisition of WCI in September 2016 added a backlog of 361 homes with an average sales price of $516,000, the company told analysts. Officials said in March that the WCI acquisition boosted the company’s move-up active adult and second home stock in Florida.
Meanwhile, Pulte’s average selling price for Q1 was $375,000, up 6% year-over-year as the company shifts its focus to move-up communities, its leadership told analysts. First-time buyer prices were up 10% to $277,000.
Toll Brothers, which posted an average sales price of $832,400 during Q1, earlier this year launched T|Select. The home line caters to first-time and active-adult buyers with its smaller floor plan and lower price-point.
- Fortune 2017 Fortune 500