Toll Brothers Says Housing Market “Strongest In 30 Years” As Wealthy Buy McMansions In Suburbs

Luxury home builder Toll Brothers’ Chief Executive Officer Douglas Yearley said in the company’s earnings statement this week that the housing market is one of the “strongest” in decades. 

“We are currently experiencing the strongest housing market I have seen in my 30 years at Toll Brothers and we continue to increase prices in nearly all of our communities as we focus on driving profitability and managing growth,” Yearley said.

He spoke of record-low interest rates, limited housing supply, a “renewed appreciation for the home as a sanctuary,” and remote working that has pushed home buyers into more luxurious homes as reasons for the market’s strength.

“The work-from-home phenomenon is also enabling more buyers to live where they want,” he said.

As wealthy folks, many of whom have been unscathed by the virus-induced recession, are fleeing metro areas for rural communities, have been responsible for the surge in luxury homebuying. 

Bloomberg notes demand for million-dollar homes is accelerating faster than any other tier in the housing market this year. 

October mortgage applications for homes priced above $766k soared 59%, the largest gain for all segments measured by the Mortgage Bankers Association. For the $150,000 to $300,000, the increase was roughly 13%. 

More or less, this is an example of the “K-shaped” recovery, which is not for everyone, as wealthy Americans have greatly benefited from soaring asset prices and have now rushed out of liberal-run cities to McMansions in rural communities to live more comfortably in the era of social-distancing.