Lennar calls for Government Bailout of U.S. Homebuilders – Who is next?

September 23, 2008 by · Leave a Comment
Filed under: Real Estate News 

Where does it stop? Are we going to bailout every company that was involved in getting us into this crisis. Most of these homebuilders did self-financing to get people into these new home developments they were building across the country. I have 100% against any action as each time we intervene in the market we are getting farther away from a free-market and into something else that sounds a lot like corporate welfare. Who is next, Airlines, Autos, Silicon Valley or Starbucks? We need to get out of the way and purge the system of all of this excess and get prices down to a more sustainable level that matches wages so we can rebuild our middle class. Mark my words, Made in America is coming back with a vengeance.

Lennar Press Release:

“While we expected the housing market to remain constrained throughout the third quarter, the weakness in the market actually accelerated as a result of increased foreclosures, weakened consumer confidence and tightened mortgage lending standards,” said Lennar Chief Executive Stuart Miller, according to a press release.

On a positive note, the company widened its adjusted gross-profit margin on home sales by four percentage points from a year earlier, to 18%, and halved its selling, general and administrative expenses.
“Although the federal government has recognized that stabilizing the housing market is critical to solving the current credit crisis, the government has yet to act meaningfully to help stabilize home prices,” the company said.
“While we were encouraged that Congress passed the July housing stimulus bill as a first step, additional government actions will be necessary to help facilitate housing market stabilization, which in turn will help stabilize the financial markets as well.”

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