Toll Brothers Tightens Land Underwriting Standards as Demand Moderates

Toll Brothers is tightening its land underwriting criteria by using stricter internal rate of return and margin screens, HousingWire reported. The luxury homebuilder is shifting its focus to prime locations as sales slow, demand moderates, and sales prices continue to decline across the market. [1]

HousingWire reported that homebuilding land acquisition decision-makers are adopting a more granular and real-time review process for each deal. While many builders currently face liabilities from land purchased during stronger market conditions, Toll Brothers has spent recent years raising and further tightening its underwriting standards to navigate challenging selling conditions. [1]

Alongside its disciplined underwriting, the company continues to launch new residential projects nationwide. The Manila Times reported that Toll Brothers announced a new luxury home community coming soon to Rocklin, California. Additionally, The Business Journals reported that the builder is expanding to Pierce County with a 47-home luxury development, while MyChesCo reported the opening of a townhome development with prices starting at 1 million dollars in Doylestown. [3][4][6]

Toll Brothers builds, markets, and finances residential and commercial properties in the United States. In 2020, the company was the fifth largest home builder in the United States based on homebuilding revenue, and it ranks 411th on the Fortune 500 list. [7]