America’s largest homebuilder warns of slow spring selling season as affordability, confidence weigh on buyers
From Yahoo Finance: 2025-04-17 11:03:00
America’s largest homebuilder, D.R. Horton, reported a 15% decline in net sales orders for Q2, falling short of analyst estimates. The company also revised its full-year sales forecast, expecting revenue below analyst expectations. DHI stock rose 2% but is down 13% in 2025. Builders face challenges amid trade fights and uncertainty.
The company’s cancellation rate increased slightly to 16%, indicating buyer hesitancy. D.R. Horton cited affordability constraints and declining consumer confidence for the sluggish start to the spring selling season. Land costs have risen 3% last quarter, contributing to inflationary pressures. Mortgage rates remain unstable, impacting buyer affordability.
Suppliers have raised prices by 6.3% on average in response to tariffs, adding $10,900 to the cost of a new home. D.R. Horton remains confident in its supply chain despite rising costs. The company expects land costs to continue increasing and contribute to inflationary pressures. Mortgage rates are approaching 7%, impacting buyer affordability.
Despite uncertainties, D.R. Horton reported improved sales pace in March and April compared to February. The company has had to offer incentives to drive buyers to commit to homeownership. Romanowski expressed confidence in their labor force and supply chain. Traffic remains strong, but uncertainty looms over the housing market.