Real-estate CEO reveals new home trend and China tariffs impact

Hovnanian Enterprises Inc., a real-estate company that markets, designs, builds and sells homes, is doing quite well on the stock market, despite losing $7.6 million in the most recent quarter.

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Why is that? Ara Hovnanian, the Hovnanian CEO, told FOX Business' Stuart Varney on "Varney & Co.", it's because they're focused on growth, which has expenses attached to it.

"Our sales were up 23 percent for the quarter," Hovananian said. "The first month of our fourth quarter, we were up 38 percent. So, we feel quite good."

Hovnanian hopes to a successful fourth quarter will make their entire year profitable.

He also said the China tariffs haven't affected his company as much as anticipated.

"There was a greater effect from tariffs a couple of years ago on lumber that came in from Canada," Hovnanian said. "Of course, there are many products that are imported from China. They're used in houses, but thus far, it hasn't had a huge effect."

There was a greater effect from tariffs a couple of years ago on lumber that came in from Canada.

- Hovnanian CEO Ara Hovnanian

He mentioned a growing trend in real estate right now is a move away from larger homes and towards more modestly sized ones.

"The biggest trend right now is getting super affordable for the entry-level buyer," Hovnanian said. "So, those homes have been getting smaller and smaller."

The biggest trend right now is getting super affordable for the entry-level buyer.

- Hovnanian CEO Ara Hovnanian

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Hovnanian said adult buyers over the age of 55 are also buying smaller homes as they downsize from larger family-oriented houses.