Taylor Morrison

Taylor Morrison’s CEO told analysts “higher mortgage rates and uncertainties surrounding the economy has pushed many potential homebuyers and all consumer cohorts to the sidelines.”“SHERYL DENISE PALMER, CHAIRMAN, PRESIDENT & CEO: And lastly, our entry-level communities continued to face the most pressure as we would expect given the greatest affordability constraints among these buyers. However we are still seeing healthy traffic activity at these lower price points and are working diligently on qualification solutions. Generally speaking, higher mortgage rates and uncertainties surrounding the economy has pushed many potential homebuyers and all consumer cohorts to the sidelines, and we continue to believe it will take some time for the market to find its new equilibrium as interest rates have most recently reached as high as 8%. This will require stabilization in pricing as much as an improvement in consumer confidence and buyer psychology led by clarity in the Federal Reserve’s strategy.” (Taylor Morrison Home Corp Earnings Call, 10/26/2022)

Taylor Morrison’s CEO: “we will prudently manage our starts pace as evidenced by the moderation in our monthly starts to 1.5 homes per community during the quarter from 3.5 a year ago”“SHERYL DENISE PALMER, CHAIRMAN, PRESIDENT & CEO: Second, we will prudently manage our starts pace as evidenced by the moderation in our monthly starts to 1.5 homes per community during the quarter from 3.5 a year ago. At quarter end, our inventory remained healthy with just over 2,500 unsold homes under construction, of which 0.5 per community were finished. Additionally, our teams are engaged with our suppliers and trade partners to reduce costs and rationalize expenses to current market conditions, with success likely to be based on each market’s total starts activity.” (Taylor Morrison Home Corp Earnings Call, 10/26/2022)

Taylor Morrison’s COO told analysts the company saw a “nearly 70% year-over-year decline in our third quarter spend on new homebuilding land acquisitions.” “ERIK HEUSER, EXECUTIVE VP & CHIEF CORPORATE OPERATIONS OFFICER: For deals in process, we are leveraging our strong relationships with land sellers to renegotiate timing, terms and/or price as appropriate. In fact, for the third quarter, 80% of our contemplated core business land spend progressing through the investment committee was restructured or terminated when underwriting no longer met our required thresholds. This resulted in $7.4 million of pre-acquisition walk-away expenses during the quarter. This highly scrutinizing approach was evident in the nearly 70% year-over-year decline in our third quarter spend on new homebuilding land acquisitions to $102 million, the lowest level since 2016.” (Taylor Morrison Home Corp Earnings Call, 10/26/2022)