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July 26, 2014

Private Homebuilders Taking Bigger Bite Out of Market

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Private Homebuilders Taking Bigger Bite Out of Market

Private homebuilders are looking to go public, which could “alter the ranks of the nation’s top builders,” The Wall Street Journal reports.

Private luxury homebuilder Taylor Morrison, based in Scottsdale, Ariz., plans to soon sell stock in an initial public offering, which could be the first of many private builders to go public. The homebuilder plans to sell 250 million shares to the public for its IPO. 

This also would make it the sixth largest publicly traded homebuilder in the U.S., pushing it ahead of KB Home and just behind Toll Brothers, The Wall Street Journal reports. The homebuilder would also be the first builder to go public in more than 15 years. 

Others could follow suit. "There are at least five other home builders that are owned by hedge funds that will be likely to take them public over the next three years," says John Burns, a builder consultant.

This could mark the perfect time for homebuilders to go public as investors show a strong interest in builder stocks, says Alex Barron, an analyst with the Housing Research Center in El Paso, Texas. 

Homebuilder stocks are soaring this year. Seven publicly traded builders tracked by the Dow Jones U.S. Home Construction Index are up 70 percent this year. Sales of new homes reached a four-year high in September, and home prices are up too. 

Source: “Home Builders Seen Tapping Public Market,” The Wall Street Journal (Dec. 11, 2012)

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