Doug Yearley, CEO of high-end homebuilder Toll Brothers, informed CNBC on Wednesday that lumber costs coming off record highs will work as a tailwind in the face of other “cost pressures.”
“Lumber is down $40,000 a home. We’re going to see the benefit of that in the second half of ’22,” Yearley stated on “Mad Money.” “[Lumber] got insane high. We understood it would return,” he included. “We’ve been very happy with how quickly it’s come back. I think it’s going to stay down.”
In May, lumber costs struck an all-time high of over $1,700 per thousand board feet, an explosive rise from a pandemic low listed below $300 less than a year previously. Lumber settled around $500 on Wednesday.
“The tailwind of lumber coming down is very comforting,” Yearley informed CNBC’s Jim Cramer, a day after the business reported much better than anticipated financial 3rd quarter incomes. “It’s going to help us. It’s going to drive some margin. But I think it’s going to offset some of the other cost increases that we’re feeling.”
“It’s taken us a little longer to build these houses. There are real supply chain issues. There’s labor issues,” Yearley stated. “It took about two weeks longer in our third quarter to deliver a home. We expect that to continue for a couple more quarters as we manage through it.”
Shares of Toll Brothers increased more than 4% on Wednesday to $6366 each. The stock is up more than 46% up until now this year.
