D.R. Horton recorded a lower fourth-quarter profit as affordability concerns continued to put off home buyers.
DHI gears up to report fourth-quarter results as affordability hurdles, mortgage rates and margin pressure weigh on expectations.
D.R. Horton remains a soft "Buy" despite recent fundamental deterioration and a pricier valuation relative to peers. DHI's market leadership, diversified price points, and strong capital returns through dividends and aggressive buybacks support its investment case. Recent results show declining revenue, profits, and backlog due to high interest rates and weak housing demand, but cash flow remains solid.
Builders are sensitive to lumber pricing. But they are likely to weather the new tariffs, one analyst says.
Builder confidence stayed flat in September, but falling mortgage rates may spark a housing market rebound, with stocks like DHI, TOL, HD, LOW and MAS already gaining ground.
Between elevated rates and historically high home prices, the housing market has deterred buyers, many of whom are uncomfortable assuming a 30-year fixed-rate mortgage above 6%, according to the National Association of Realtors (NAR).
D.R. Horton (DHI) reported earnings 30 days ago. What's next for the stock?
These home builders are showing the best growth potential for sales and for earnings.
Previously unloved stocks are making a big comeback before Jackson Hole, the Federal Reserve's annual summer economic summit
Many homebuilders like D.R. Horton experience the softness in the housing market, but I don't think it will lead to a crash considering their cautious construction and low inventory. DHI takes advantage of its geographical diversification and inventory management to set a strategic pricing, attract demand, and stabilize operating costs. Its robust liquidity with only a 0.90x Net Debt/EBITDA ensures its sustainability.
Downgrading DHI to sell as affordability pressures and cautious consumer sentiment are clearly hurting demand, margins, and backlog. Management's increased use of incentives and shift to lower-priced homes signal demand is being bought, not organic, pressuring long-term profitability. Stock trades at 12x forward PE, well above historical mid-cycle multiples, despite deteriorating fundamentals and weakening demand outlook.
D.R. Horton, Inc. (NYSE:DHI ) Q3 2025 Earnings Conference Call July 22, 2025 8:30 AM ET Company Participants Bill W. Wheat - Executive VP & CFO Jessica Leigh Hansen - Vice President of Investor Relations Michael J.