Homebuilder to steer away from affordable markets
Homebuilder K. Hovnanian Homes will put less emphasis on building in “affordable markets,” its CEO said during Thursday’s earnings call.
Outlining the company’s strategy moving forward to protect margins, the CEO of the country’s 17th-largest builder by volume told listeners: “We were too heavily invested in the more affordable tertiary markets with entry-level homes," Ara K. Hovnanian said.
“This has been the more challenging segment of the housing market, and we have been staying clear of these locations in our new land acquisitions.”
K. Hovnanian Homes constructed about 6,150 residences in 2024 and operates in 13 states.
The homebuilder plans to focus more on its active-adult segment, which targets consumers aged 55 and older, in addition to move-up homebuyers. The move-up segment is “performing the best all over the country,” said Hovnanian.
The homebuilder noted that the continued weight of affordability is dragging down buyer interest and profit margins, and that the company had offered its highest share of incentives ever in the last quarter: 12.2% of a home’s average sales price. Most of that went toward mortgage buydowns.
“Buyer interest has grown compared to last year,” said Hovnanian, pointing toward a 15% quarter-over-quarter increase in foot traffic to developments. “However, many potential buyers are still hesitant to move forward and enter contracts, given a lot of economic and world uncertainty.”
Cargill opens new employee housing for its Colorado workers
Cargill, a beef company, officially opened a new 81-unit apartment complex to provide affordable housing for its employees in Fort Morgan, Colorado.
This is the latest project to be completed as part of an overall $40 million initiative, with the goal of improving workforce support, according to a Dec. 4 press release from the company. This is an issue various communities across the country struggle with due to high housing and construction costs.
Earlier this year, Cargill added 27 townhouses. Both projects provide housing for more than 100 employees at Cargill’s beef-processing plant, the company said.
“This project is already making a meaningful difference for our team,” the general manager of the Fort Morgan facility, Johanna Hernandez, said in a statement. “Nearly 60 percent of our employees commute from outside Fort Morgan, many traveling 45 minutes to an hour each way. Providing homes in Fort Morgan gives our employees more time with their families, reduces daily stress, and strengthens the fabric of this community we are proud to serve.”
Along with the housing initiatives, Cargill said it has provided more than $500,000 in grants to childcare services and first-time homebuyer education.
The housing initiative is part of a broader $90 million commitment to Fort Morgan and the future of the U.S. beef industry that includes automation and technology upgrades at the plant.