Dr. Horton’s latest financial performance suggests consumers and the economy could be in trouble if interest rates don’t come down. The Arlington, Texas-based homebuilder reported quarterly earnings that missed Wall Street analysts’ expectations and gave disappointing guidance on future results before trading opened on Tuesday, sending shares tumbling 11%. . Chief Executive David Alder said volatile interest rates are keeping some homebuyers on the sidelines. “While mortgage rates have fallen from their highs earlier this year, many potential homebuyers expect rates to be even lower in 2025,” he said in a statement. This year, according to Daily Mortgage News The DHI YTD mountain DR Horton 30-year fixed mortgage rate to date is currently 7%. That’s down from the 8% reached last October, but the highest level since July 10, according to the website. Mortgage rates are tied to the yield on the 10-year Treasury note, which has surged recently. Bond yields are inversely related to prices. In fact, rates have actually risen since the Fed began its rate-cutting campaign in September, when it lowered the federal funds rate by half a percentage point. Strong economic data coupled with uncertainty over the central bank’s path to future interest rate cuts weighed on benchmark Treasuries. DR Horton said revenue for the fiscal year ending in September 2025 is expected to be between $36 billion and $37.5 billion, below analysts’ forecasts of $38.91 billion in the FactSet consensus. In its just-ended fiscal fourth quarter, the company reported earnings of $3.92 per share on revenue of $10 billion. Analysts polled by London Stock Exchange Group (LSEG) expected earnings of $4.17 per share on revenue of $10.22 billion. The results also weighed on shares of other homebuilders, with Toll Brothers, Pulte Group and KB Home all down about 4%. The S&P Home Builders ETF (XHB), which tracks the S&P 500 Home Builders Index, fell 3%. Among home improvement retailers, Home Depot and Lowe’s both fell about 2%.
While investors focus on Big Tech earnings, homebuilders issue dire warning | Real Time Headlines
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