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Key Takeaways
- D.R. Horton’s earnings for the first quarter fell short of expectations on Thursday, and the company cut its full-year estimates.
- Executives reported that sales for the start of spring were lower than expected.
- In the next couple of weeks, several homebuilders will be reporting their own results.
D.R. Horton (DHI), the largest homebuilder in the United States, has become the latest to voice concerns about the housing industry after falling short of its estimates.
The company cut its full-year forecasts for both revenue and homes closed as its first-quarter results missed expectations, saying that the spring selling season has "started slower than expected" amid concerns over affordability and worsening consumer confidence. The shares rose yesterday due to an expanded buyback program and encouraging margins.
The industry could be focusing on the upcoming results. PulteGroup (PHM), Taylor Morrison Home(TMHC), Meritage Homes(MTH), Tri Pointe Homes(TPH), Century Communities(CCS), M/I Homes (“MHO”), and M/I Homes (“MHO”) will each report their results next week. NVR (NVR), LGI Homes “LGIH”, and Green Brick Partners (“GRBK”) are due to report the week following.
D.R. Horton’s report was in line with other reports that have been released. KB Home, Lennar and Toll Brothers have all stated that they have seen a slowing of the housing market in the 1st quarter. D.R. According to an AlphaSense transcription, Horton COO Michael Murray stated in the earnings call on Thursday that affordability is still a “pressure” point for homebuyers.
Analysts say that Trump’s tariffs on homes could make them more costly and hurt demand.
"I think we're all going to have to come to the table and adjust to deliver a house that the market finds compelling and can afford," D.R. Horton CEO Paul Romanowski said this week, adding that "we're just going to have to see how this plays out and work with our supply partners and vendors to figure it out together."
