A row of new homes under construction.

Nation’s largest homebuilder brings some heat to a cool spring 

DR Horton, seen as a “heat check” for the housing industry, blew past analyst expectations with its fiscal Q2 profits and offered an encouraging take on spring.

April 20, 2023
2 minutes

Key points:

  • DR Horton reported earnings of $2.73 per share, far exceeding predictions.
  • The company recently closed on its millionth home.
  • A third of current housing inventory is new construction vs. the more typical 10% or so, according to the National Association of Home Builders.

Like a flower pushing its way through frozen ground, the nation's largest homebuilder blew past earnings expectations and brought some warmth to a chilly spring for real estate.

DR Horton on Thursday reported its fiscal Q2 profit of $942.2 million, or $2.73 per share. Analysts had expected $1.93 per share.

More notably, however, chairman of the board Donald R. Horton offered a downright celebratory statement: "We are excited to announce that we recently closed our one millionth home, a first for any homebuilder! We are proud to have been a part of a million families achieving their dreams of homeownership over the past 45 years."

Observers view DH Horton as a "heat check" for the industry more broadly, and Horton turned up the optimism thermostat, saying the spring selling season is off to an "encouraging start." 

"Despite higher mortgage rates and inflationary pressures, demand improved during the quarter due to normal seasonal factors, coupled with our use of incentives and pricing adjustments to adapt to changing market conditions," he said.

And the inventory woes that have made the housing market challenging for buyers present an opportunity for builders.

"Although higher interest rates and economic uncertainty may persist for some time, the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable," Horton added.

The National Association of Homebuilders struck a more cautiously optimistic tone, but one aligned with DR Horton in terms of the impact of inventory constraints.

Right now, a third of housing inventory is new construction, according to the NAHB. That number is usually around 10%. New construction sales incentives are also fueling homebuyer interest.

DR Horton, meanwhile, is looking beyond spring to build on home sales revenues of $7.4 billion on 19,664 homes closed.

"We are well-positioned to navigate changing market conditions with our experienced operators, diverse product offerings and flexible lot supply and are focused on turning our inventory to maximize returns and capital efficiency in each of our communities."

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