Despite homebuilding slowdowns and high mortgage rates, Builders FirstSource CEO Dave Rush told CNBC’s Jim Cramer that the demand for housing remains strong.
“When we came into the year, we were a little cautious as well,” Rush said. “And what proved to be the point is housing demand is really strong, and the demand for housing and the fact that housing has been underbuilt, kept housing at a relatively stable level.”
The homebuilding materials supplier — whose customers are primarily homebuilders and professional contractors — exceeded Wall Street’s expectations when it released earnings on Thursday. Up 2.56% by close, Builders FirstSource reached a new 52-week high.
According to Rush, much of his company’s success is due to “value-added solutions” that help homebuilders save costs and labor. Builders FirstSource has invested over $100 million in automated technology, he said.
Homebuilders have been able to keep business “healthy” but not “robust,” Rush said, adding that “we need just need a little help on the mortgage rates side.” He said new construction will be a big part of the market going forward, as there is lower existing home inventory for sale.
“We tailor our business to the professional contractor, 90 plus percent of our business is delivered to the job site,” Rush said. “New construction is where people really almost have to go if they want to get into a new home.”
