D.R. Horton Profit Dips Amid Affordability Woes

D.R. Horton experienced a decrease in first-quarter profit, primarily due to ongoing homebuyer affordability concerns. These challenges have led to lower sales volumes and a greater reliance on incentives, which are expected to continue throughout fiscal year 2026. Executive Chairman David Auld highlighted that affordability constraints and cautious consumer sentiment are significantly impacting new home demand.

The company's average closing price for the first quarter was $365,500, remaining flat sequentially but down 3% year-over-year. D.R. Horton closed 17,818 homes, a 7% reduction compared to the previous year's quarter. However, recent declines in mortgage rates offer a glimmer of hope for a market recovery, with an uptick in activity observed at sales offices. The company plans to increase new home starts in the second quarter.

For the upcoming second quarter, D.R. Horton projects revenue between $7.3 billion and $7.8 billion, with 19,700 to 20,200 homes closed. The company reiterated its fiscal 2026 guidance, expecting revenues between $33.5 billion and $35 billion, with 86,000 to 88,000 homes closed. Despite market pressures, D.R. Horton posted net income of $594.8 million, or $2.03 per share, for the fiscal first quarter.