Even the largest homebuilder in the United States is facing challenges from affordability issues and cautious buyers.
D.R. Horton, based in Arlington, reported that high mortgage rates and rising home prices have led to fewer buyers at the end of its fiscal year. The company responded by offering more incentives to keep sales moving, according to a report from the Dallas Morning News.
For the quarter ending September 30, D.R. Horton’s closings dropped by 1 percent to 23,368 homes. Over the full year, sales fell by 5 percent to 84,863 homes. Quarterly revenue declined by 3.2 percent to $9.7 billion, while net income decreased nearly 31 percent to $905 million. For the fiscal year ending September 30, total 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 had reported a net income of $1 billion for the quarter ending June 30—a drop of 24 percent compared with last year’s $1.4 billion for the same period.
“New home demand is still being impacted by ongoing affordability constraints and cautious consumer sentiment,” Executive Chairman David Auld said in a statement. “We expect our sales incentives to remain elevated in fiscal 2026.”
The company has used incentives such as rate buydowns, closing-cost assistance and free upgrades—measures it plans to continue even as borrowing costs decline.
The average rate on a 30-year mortgage recently fell to 6.26 percent from almost 8 percent one year ago, according to Freddie Mac data. The Federal Reserve also lowered its benchmark interest rate again on Wednesday by another quarter percentage point (now at four percent), which may help some potential buyers.
Despite these changes, affordability remains a major issue for homebuilders nationwide; Census Bureau data shows that the median new-home price across the country reached $413,500 in August—over forty percent higher than ten years ago.
Horton executives said they are focused on helping buyers manage their monthly payments through lower financing costs.
“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.”
The company has also reduced costs and shifted toward smaller floor plans aimed at entry-level buyers in many Sun Belt markets where it holds a strong presence.
