One of the largest homebuilders in the United States has seen a steep decline in sales in the final months of 2022, reported the Dallas Morning News.
D.R. Horton, an Arlington-based builder, saw sales decline by 38% nationally in its first fiscal quarter, which ended on December 31.
In the previous quarter, the builder saw sales decline by more than 15%.
Donald Horton, chairman of the company, blamed the decreased sales on inflation and higher interest rates.
“While these pressures may persist for some time, the supply of both new and existing homes at affordable price points remains limited, and demographics supporting housing demand remain favorable,” Horton said in a statement. “We are well-positioned to navigate changing market conditions with our experienced operators, diverse product offerings and flexible lot supply and are focused on turning our inventory to maximize returns and capital efficiency in each of our communities.”
Residential Strategies, a Dallas-based housing analyst, said that North Texas has seen the largest decline in home starts year-over-year since the Great Recession. There has been a 38% decline in construction, and builders have pivoted to focus on finishing and selling homes already being worked on.
D.R. Horton invested $1 billion in rentals in 2021, with home sales declining due to affordability and rentals now being seen as more stable.
According to Builder, the company’s rental business generated $328 million of revenue during the first quarter on sales of 294 single-family rental homes and 300 multifamily units.
David Auld, CEO of D.R. Horton, said that the company remained optimistic despite the current market.
“I do think the credit markets have stabilized somewhat, consumer confidence improved a little bit, job growth continues to be very good,” Auld said. “Overall, if you look at pent-up demand and just a generalized economy becoming less bad; very good signs for housing.”
During the company’s quarterly earnings call, Paul Romanowski, executive vice president and co-chief operating officer, said, “We are continuing to offer mortgage interest rate locks, buydowns, and other incentives to drive traffic to our communities, and we are reducing home prices where necessary to optimize the returns on our inventory investments.”
“Our second quarter sales volume will depend on the strength of the spring selling season, and we currently expect significantly higher levels of net sales orders in the second quarter as compared to the first quarter based on historical seasonal trends, current market conditions, and our inventory of completed homes available for sale.”