Toll Brothers Earnings: Spring Selling Season Off to a Good Start for Luxury Homebuilder

Financial results for no-moat Toll Brothers' fiscal first quarter, ended Jan. 31, were reflective of a solid demand environment for new homes heading into the important spring selling season for homebuilders, which is generally viewed as mid-January to mid-April. Homeownership affordability remains challenging for many prospective buyers, but Toll Brothers serves more-affluent customers who have strong balance sheets and are therefore less affected by higher interest rates. Indeed, according to management, approximately 25% of Toll Brothers' customers paid all cash during the first quarter, and the average down payment (as a percentage of home price) for customers needing a mortgage was approximately 33%, well above the national average, which was 13% in 2022, according to the National Association of Realtors.