US homebuilder DR Horton profit falls as high mortgage rates hit demand

US HOMEBUILDER DR Horton posted a fall in quarterly profit on Tuesday (Nov 7), as demand for housing slowed with mortgage rates at a more than 20-year high.

With current 30-year fixed mortgage rates nearing 8 per cent and home prices continuing to surge due to a shortage of units for sale have made homes unaffordable for many.

This has pushed homebuilders to increase incentives with mortgage rate buydowns, especially for entry-level buyers, and reducing the size of new homes to offer lower price points, among others.

Net income attributable to DR Horton for the fourth quarter ended September fell to US$1.51 billion, or US$4.45 per share, from US$1.65 billion, or US$4.67 per share, a year earlier.

The largest US homebuilder by volume closed sales of 22,928 homes, within its fourth quarter guidance range of 22,800 to 23,300, which indicates improving construction cycle times due to easing supply chain disruptions. REUTERS