The nation’s largest homebuilder started off the year hot, despite inflation and high mortgage rates.
Arlington-based D.R. Horton sold 26,456 homes in the quarter ending March 31, marking a 14 percent increase year-over-year, the Dallas Morning News reported. That’s also a 46 percent jump from the previous quarter, when it sold more than 18,000 homes.
Brian Yarbrough, an Edward Jones analyst who closely tracks D.R. Horton, attributed the sales surge to the company’s adept execution and the dearth of existing housing inventory in the market.
Dallas-Fort Worth, a key market for D.R. Horton, reported a mere three months of housing inventory in March, according to data from the MetroTex Association of Realtors. That’s significantly below the five- to six-month threshold indicative of a balanced market.
“They’re in a very good environment right now,” Yarbrough told the outlet. “There’s a lot of demand for new homes. So you wonder … affordability is at an all-time low. You have to question how long this can continue.”
D.R. Horton raked in $1.2 billion in profit last quarter, up 24 percent from the same period a year ago, when it profited $942 million. Consolidated revenue for the quarter stood at $9.1 billion.
Net home sales orders totaled 44,525 in the six months ending March 31, compared to 36,524 orders during the same stretch in the previous fiscal year. Profits reached $2.1 billion in October through March, marking an 11 percent increase.
Buoyed by its strong performance, D.R. Horton raised its fiscal year forecast, anticipating consolidated revenues of $37.7 billion, up by $1 billion. The company also expects to close on an additional 2,000 homes this fiscal year.
However, challenges persist as inflationary pressures and soaring mortgage rates cast a shadow over the housing market’s outlook. Consumer Price Index data revealed higher-than-expected inflation in March, while the average 30-year mortgage rate surpassed 7 percent, a two-decade high, according to Freddie Mac.
In response, D.R. Horton and other builders have introduced incentive programs such as rate buy-downs to mitigate affordability concerns. Paul Romanowski, D.R. Horton’s President and CEO, affirmed the company’s commitment to sustaining these incentives amid ongoing rate volatility.
—Quinn Donoghue
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