By Shaina Mishkin

Early signs of housing demand are trending a little higher than last year, executives at the home builder Toll Brothers said Wednesday.

Some of the builder's trends are a good omen for the housing market's typically busy spring season -- but its well-heeled clientele means it's more insulated from housing cost headwinds than the broader market.

The builder's measures of web traffic, physical traffic, and deposits are slightly higher than the same time last year, CEO and chairman Douglas Yearley, Jr., said on a Wednesday morning call with analysts.

"It is only up modestly over a year ago -- but at the moment, we'll take it," he said.

The builder reported earnings of $2.19 a share on about $2.15 billion in revenue, beating FactSet consensus estimates that called for earnings of $2.11 a share on $1.85 billion in revenue. The builder reaffirmed its 2026 guidance, which calls for deliveries in a range from 10,300 to 10,700 and a 26% adjusted home sales gross margin. The stock was up 1.9% in morning trading, and is up about 22% so far this year.

Demand was strongest in the coastal eastern corridor from Boston to South Carolina, in California, and in metros such as Las Vegas, Boise, Ida., and Reno, Nev., Toll Brothers Executive Vice President Karl Mistry said. Mistry will succeed Yearley as CEO in March, while Yearley will become the board's executive vice chairman.

"Most of Florida seems to have found its footing, although Tampa remains challenged," he said. Other slow areas include Atlanta, San Antonio, and the Pacific Northwest.

Early signs of demand trending higher than the year prior is a reason for "cautious optimism," Yearley noted -- but "it's too early to be high-fiving around here," he said. "We'll have to see how it how it plays out."

The builder's commentary is a positive sign in a market of mixed messages ahead of the spring season. While home purchase loan application data so far this year has remained higher than year-ago levels, other measures, such as existing-home sales, have disappointed.

But it's also reflective of a wealthier buyer base than the broader market. The median home delivered by the builder in the first quarter was priced at $977,000 on average. That's a significant premium to the median sales price of a new home more broadly, which was just under $400,000 in October, the most recent month for which data is available.

Buyers of luxury homes are "less sensitive to the affordability pressures that continue to impact the entry-level buyer," Yearley said. The majority of their buyers are purchasing move-up homes or downsizing, he said.

The builder's move-up buyers "benefited from growth in their home equity and stock market appreciation," Yearley said.

The company's first-time buyers, meanwhile, "are older millennials buying their first home later in life when they have higher incomes and are more financially secure," he noted. Such buyers closed on homes at an average price of $670,000 in the first quarter.

Investors' next read on the broader market will come on Thursday, when the National Association of Realtors reports its measure of pending home sales. Economists surveyed by FactSet expect the index reading, which is based on contract signings, will increase to 78.2, up from 71.8 one month prior.

Write to Shaina Mishkin at shaina.mishkin@dowjones.com

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(END) Dow Jones Newswires

February 18, 2026 11:19 ET (16:19 GMT)

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