Hurricane Milton has left a significant mark on the Florida housing market, with cities such as Orlando, Tampa, Lakeland, Sarasota and Daytona Beach facing the brunt of the storm.
As recovery efforts begin, analysts expect the state’s homebuilding sector to absorb an estimated $1.7 billion to $2.5 billion hit, according to a report from Goldman Sachs analyst Susan Maklari.
Homebuilder Exposure To Milton And Potential Delays
Homebuilders with significant exposure in the affected regions face potential delays in construction and home closings.
Maklari notes that major homebuilders such as PulteGroup Inc. (NYSE:PHM), Lennar Corp. (NYSE:LEN), and D.R. Horton Inc (NYSE:DHI) have significant exposure in the impacted regions, with 17%, 14%, and 11% of their 2023 closings, respectively, concentrated in these areas.
In contrast, builders like KB Home (NYSE:KBH) and Toll Brothers Inc. (NYSE:TOL) have minimal exposure, with less than 3% each. Historically, homebuilders in Florida have faced delays of around 4-6 weeks following severe weather events, primarily due to resource allocation to existing community recovery efforts and labor shortages.
Given Hurricane Milton’s strength, widespread geographic reach, and timing — just two weeks after Hurricane Helene — Maklari believes these delays could be extended even further.
"We expect some closings to be delayed, but this appears to be more of a timing issue. Any potential shortfall in Q4 will likely be made up in early 2025," Maklari said.
The good news for builders is that many homes are already in later construction stages as they aim to hit year-end targets, and most builders tend to avoid constructing in floodplains.
Goldman Sachs estimates the total industry impact to fall ...
