D.R. Horton, the largest homebuilder in the United States, has reported a decline in revenue and profits as affordability challenges continue to affect homebuyers. The Arlington-based company announced that high mortgage rates and rising home prices led many potential buyers to hold off on purchases at the end of its fiscal year.
For the quarter ending September 30, D.R. Horton’s closings dropped by 1 percent to 23,368 homes. Over the full fiscal year, sales decreased by 5 percent to 84,863 homes. Quarterly revenue fell by 3.2 percent to $9.7 billion, while net income declined nearly 31 percent to $905 million. For the entire fiscal year ending September 30, revenue was down 6.9 percent to $34.25 billion and profits were about 25 percent lower at $3.62 billion.
Earlier this year, D.R. Horton reported a net income of $1 billion for the quarter ending June 30—a decrease of 24 percent compared with $1.4 billion during the same period last year.
Executive Chairman David Auld commented on current market conditions: “New home demand is still being impacted by ongoing affordability constraints and cautious consumer sentiment,” he said in a statement. “We expect our sales incentives to remain elevated in fiscal 2026.”
The company has been offering incentives such as rate buydowns, assistance with closing costs, and free upgrades in an effort to encourage sales despite changes in borrowing costs.
According to Freddie Mac data, average rates for a 30-year mortgage have dropped from nearly eight percent a year ago to around six-point-two-six percent recently. The Federal Reserve also reduced its benchmark rate again on Wednesday by another twenty-five basis points—now at four percent—which may provide some relief for prospective buyers.
However, affordability remains a major issue for both builders and consumers nationwide as new-home prices continue rising; Census Bureau figures show that median new-home prices reached $413,500 in August—over forty percent higher than ten years ago.
Company executives emphasized their focus on keeping monthly payments affordable for buyers through cost reductions and smaller floor plans aimed at entry-level customers.
“We did lean into the incentives pretty hard in the quarter, as we talked about and expected to,” CEO Paul Romanowski told investors Tuesday. “For our buyer, it still comes back to the monthly payment.”
D.R. Horton maintains significant market presence across Sun Belt states while adjusting its strategies amid changing economic conditions.
