Even the country’s largest homebuilder isn’t immune from price-shy buyers.
Arlington-based D.R. Horton said this week that high mortgage rates and sticker shock kept buyers on the sidelines through the end of its fiscal year, forcing the company to sweeten deals to keep sales moving, the Dallas Morning News reported.
For the three months ending Sept. 30, the nation’s largest homebuilder’s closings fell 1 percent to 23,368 homes, while full-year sales slipped 5 percent to 84,863.
Quarterly revenue dropped 3.2 percent to $9.7 billion, and net income tumbled nearly 31 percent to $905 million. For the fiscal year ending Sept. 30, revenue was down 6.9 percent to $34.25 billion and profits sank roughly 25 percent to $3.62 billion.
The trend was reflected earlier this year, when D.R. Horton reported $1 billion in net income in the quarter ending June 30, a 24 percent decline from the same period last year, when the company reported a net income of $1.4 billion.
“New home demand is still being impacted by ongoing affordability constraints and cautious consumer sentiment,” Executive Chairman David Auld said in a statement. “We expect our sales incentives to remain elevated in fiscal 2026.”
Those incentives include rate buydowns, closing-cost assistance and free upgrades — strategies Horton says it will continue deploying despite easing borrowing costs.
The average 30-year mortgage rate fell to 6.26 percent, down from nearly 8 percent a year ago, according to Freddie Mac. The Federal Reserve also trimmed its benchmark rate again Wednesday by another 25 basis points to 4 percent, which could give homebuyers a modest boost.
Still, affordability remains the industry’s central challenge. The median new-home price nationwide reached $413,500 in August, up more than 40 percent from a decade ago, Census Bureau data shows.
Horton executives said the company is focused on keeping homebuyers’ monthly payments manageable — a calculation that increasingly depends on lower financing costs.
“We did lean into the incentives pretty hard in the quarter, as we talked about and expected to,” CEO Paul Romanowski told investors Tuesday. “For our buyer, it still comes back to the monthly payment.”
The builder, which dominates many of the nation’s Sun Belt markets, has been cutting costs and shifting to smaller floor plans to appeal to entry-level buyers.
— Eric Weilbacher
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