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Housing Recovery 'Fundamentally Strong': Lennar CEO

Despite being headquartered in one of the states hardest hit by the housing crash, the CEO of Miami-based Lennar Homes said he is bullish both on the rental side of the business and the single family side. No wonder, Lennar recently announced it was getting into multi-family apartment construction.

CEO Stuart Miller, however, said it is not a hedge against the housing recovery.

"We are clearly in the midst of a recovery in housing and it is a fundamentally strong recovery," said Miller told CNBC from the JPMorgan Chase Housing Summit. "Prices are moving up not because costs are moving up so much, but because demand is getting so strong."

Lennar is seeing that demand in Nevada, where despite a 334 percent surge in new foreclosures, according to RealtyTrac, builders are ramping up production. Housing starts in Las Vegas are up nearly 100 percent from a year ago.

(Read More: Map: Tracking the US Real Estate Recovery)

"You see a lot of numbers that aren't matching up because you're looking at too big of a market," Miller noted."There are sub markets where the inventories are cleared, where there are no foreclosures. Those are the markets we are primarily focused on."

Stuart Miller
Jamie Rector | Bloomberg | Getty Images
Stuart Miller

Miller also said he is not concerned by the huge number of investor-owned single-family rental homes. He believes that renters may end up as buyers of these homes, but others are not so sure.

(Read More: Housing Recovery Leaves Some Behind)

"I don't buy it," said Mark Hanson, a California-based housing analyst. "Yes, the investor will give them a chance to bid on it, but in this market Wall Street will put the houses on the MLS in hopes of a bidding war."

Home prices are already moving higher across the nation, largely due to a severe lack of for-sale supply. Miller is unconcerned about the swift price increases and points to a mortgage credit thaw as a counter-balance.

(Read More: Home Buyers Are Back, but Where Are the Houses?)

The big banks say it is not so much a thaw on their side as improving consumer balance sheets.

"Credit standards haven't changed in terms of solid fundamentals around income and documentation," said Kevin Watters, CEO of mortgage banking at JPMorgan Chase. "What has changed a little bit: Consumers' balance sheets have improved, so their debt is down."

The nation's home builders are still facing some headwinds in the form of higher land and material costs as well as a labor shortage. Still, they have been building at such low volumes for the last four years that they expect production could boom before settling back to normal building levels.

"We are likely to get to 1.7, even 2 million [housing starts] at some point as we go through recovery," Miller added.

—By CNBC's Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC

Questions? Comments? RealtyCheck@cnbc.com

  • Diana Olick serves as CNBC's real estate correspondent as well as the editor of the Realty Check section on CNBC.com.

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