Home Construction Will Feed Job Growth: CEO
The construction sector is poised for strong growth and will become a leader in job creation, predicted Sheryl Palmer, CEO of homebuilder Taylor Morrison, which had its initial public offering Wednesday at the New York Stock Exchange.
"We are in such a good place. Everybody talks about being in early innings [of a recovery]. You look at the fundamentals around us, you look at the affordability, you look at the availability of inventory and the confidence people have—I think we have some good times ahead," Palmer told "Squawk on the Street"
"This is the industry that will feed job growth going forward," she said. "I think every day we are doing good things for the economy."
Many markets that underperformed during the recession—including Phoenix, parts of Texas and Florida. and Northern California—are "on fire," she said.
"The mortgage market is in a pretty good place—a long way to go before we have to be concerned," Palmer said, adding that affordability will help support it even in an environment of rising interest rates.
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"The land market is very difficult, it's very tight," she said. "Our core mantra is to make sure that we stay in those prime, core locations. So when you look at the land availability in those core markets, the supply is very constrained, but that's good for us."
Proceeds from the IPO will be used as "growth capital," Palmer said, allowing Taylor Morrison to be "very selective" in buying real estate.
Two major shareholders taking Taylor Morrison public, private equity firms TPG and Oaktree, sold some shares into the IPO, but Palmer said they will each maintain about 39 percent of the company.
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After the IPO, which raised $628.3 million and priced at the high end of the range, Taylor Morrison stock was trading over 5 percent higher on Wednesday.