Homebuilder DR Horton results miss estimates as demand shrinks
DR Horton on Wednesday (Nov 9) missed Wall Street estimates for quarterly profit and revenue as demand for houses tapered following a spike in mortgage rates amid roaring inflation.
US mortgage rates have doubled with aggressive rate hikes by the Federal Reserve to contain decades-high inflation, making borrowing less affordable.
In another blow to homebuilders, who have enjoyed elevated home prices for a long time due to tight supply, prices slowed in August from the record pace reached in March.
Some economists suspect the growth rate will slow significantly by the end of the year.
“Beginning in June and continuing through today, we have seen a moderation in housing demand caused by significant increases in mortgage interest rates and general economic uncertainty,” chairman Donald R Horton said in a statement.
“While these pressures may persist for some time, the supply of homes at affordable price points remains limited, and demographics supporting housing demand remain favourable.”
DR Horton reported total revenue of US$9.64 billion in the fourth quarter ended Sep 30, compared with analysts’ average expectation of US$9.97 billion, according to Refinitiv data.
Net income per diluted share for the quarter stood at US$4.67, also missing analysts’ estimate of US$5.09. REUTERS
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