News
D.R. Horton · Homebuilding · Mortgage Rates · Profitability
D.R. Horton, America's largest homebuilder, reported a 20% drop in quarterly profit to $647.9 million, as high mortgage rates and economic uncertainty forced the company to offer elevated sales incentives, squeezing profitability.
Executive Chairman David Auld stated affordability constraints are weighing on the market, expecting incentives to remain high throughout fiscal 2026. Geopolitical events reversed a decline in mortgage rates, pushing potential buyers to the sidelines.
Revenue slipped to $7.558 billion from $7.734 billion, slightly missing analyst expectations. The homebuilding segment's pre-tax income plummeted 19% to $757.9 million, with the pre-tax margin contracting to 10.7%, despite a 1% increase in homes closed to 19,486.
Net sales orders, however, rose 11% to 24,992 homes. D.R. Horton's experience mirrors warnings from KB Home, which cut full-year guidance citing Middle East conflict and surging mortgage rates.
The path forward for D.R. Horton and the homebuilding sector is linked to mortgage rates and the broader economic outlook, with sustained incentives testing profitability.