D.R. Horton, the largest homebuilder in the United States, has reported a decline in revenue and profits as high mortgage rates and increased home prices have led to fewer buyers. The company, based in Arlington, stated that for the quarter ending September 30, home closings fell by 1 percent to 23,368 units. Over the full fiscal year, sales dropped by 5 percent to 84,863 homes.
The company’s quarterly revenue decreased by 3.2 percent to $9.7 billion. Net income for the quarter was $905 million, representing a drop of nearly 31 percent compared to last year. For the fiscal year ending September 30, D.R. Horton’s revenue was down by 6.9 percent to $34.25 billion while profits declined approximately 25 percent to $3.62 billion.
Earlier this year, D.R. Horton reported net income of $1 billion for the quarter ending June 30—a decrease of 24 percent from the same period last year when net income was $1.4 billion.
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.”
To address affordability issues and attract buyers, D.R. Horton has offered incentives such as rate buydowns, closing-cost assistance and free upgrades—measures that are expected to continue even as borrowing costs show signs of easing.
According to Freddie Mac data referenced in the report, average rates for a 30-year mortgage have fallen to 6.26 percent from nearly 8 percent a year ago (https://www.freddiemac.com/pmms). Additionally, the Federal Reserve reduced its benchmark interest rate again on Wednesday by another 25 basis points to reach four percent (https://www.federalreserve.gov/newsevents/pressreleases/monetary20251029a.htm), which may provide some relief for potential homebuyers.
Despite these changes in lending rates, affordability remains a major concern within the industry as median new-home prices nationwide reached $413,500 in August—an increase of over forty percent compared with ten years ago according to Census Bureau figures (https://www.census.gov/construction/nrs/pdf/pricemon.pdf).
CEO Paul Romanowski addressed investors about strategies used during this period: “We did lean into the incentives pretty hard in the quarter, as we talked about and expected to,” he said Tuesday. “For our buyer, it still comes back to the monthly payment.”
The company has also responded by reducing costs and offering smaller floor plans aimed at entry-level buyers—a move designed to help keep monthly payments manageable despite ongoing price pressures.
