Cavco Industries CEO on Housing Demand and Stock Performance

Cavco Industries' Business Model

• 🏠 Cavco Industries builds modular homes to order, costing approximately 30% of a regular home.
• 🎯 This business model is particularly effective in the current tough housing backdrop.

Addressing Housing Affordability

• 🔑 The general need for housing in the U.S. is a primary driver for the company's stock.
• 💰 Factory-built housing targets the affordability problem at its worst, especially for first-time buyers priced out of the traditional market.
• 📈 The average selling price in the fourth quarter was under $100,000, highlighting the focus on a different housing segment.

Market Activity and Regional Strength

• 🗺️ Cavco has 31 plants covering the entire U.S. population.
• ☀️ The Southeast and Southern U.S. have shown an upward trajectory in orders, with the Sun Belt being particularly strong.
• ❄️ Northern climates are expected to see a good spring selling season as winter ends.

Consumer Sentiment and Housing Deficit

• ⚠️ While consumer sentiment and interest rates impact buyers, the underlying deficit of housing since 2008 is a stronger driver.
• 📊 An estimated 35% of households can afford the median home price, creating a significant opportunity for factory-built housing.
• 🚀 The company's order backlog remains strong due to this unmet need, despite broader economic concerns.