The nation's largest homebuilder says more buyers are cancelling deals amid growing real-estate market pessimism
- The nation's largest homebuilder said 24% of its contracts fell through in its recent quarter.
- Homebuyers have been pulling back in the face of higher
mortgage ratesand market uncertainty.
A growing number of would-be homebuyers are backing out of deals for newly constructed homes as they confront higher mortgage rates and an uncertain future for the
D.R. Horton, the nation's largest builder by production volume, is no exception.
Nearly a quarter of D.R. Horton's contracts fell through in the three months ending in June, the company reported in its third-quarter earnings call Thursday. The cancellation rate of 24% was up about 7 percentage points from a year prior.
D.R. Horton executives maintained a mostly positive outlook despite the rash of cancellations, since they said the supply of homes is still low and demand, albeit diminished, remains strong. The company attributed the increase to worsening consumer sentiment as economic woes reduce buyers' confidence in the
The Federal Reserve's efforts to bring the
Although homebuilders are still a ways away from pushing the panic button, the latest quarterly earnings from D.R. Horton shows how big homebuilders are being forced to adjust to a shifting market by pulling back their production volumes, moderating their price increases, and offering more incentives to buyers.
D.R. Horton ended its third quarter with 56,400 homes in inventory, up 19% from a year ago. David Auld, the company's president and CEO, chalked up much of the slowdown to "payment shock" among homebuyers.
"Toward the middle of June, we got a 100 basis point increase in long term rates over about a three or four day period," Auld said on the earnings call. "I think that impacted cancellations."
Indeed, the national cancellation rate among homebuilders reached 14.5% in June, according to the results of a survey conducted by John Burns Real Estate Consulting. That marked the highest rate since April 2020, when the COVID pandemic initially brought the housing market to a near-standstill.
- 911 dispatchers say skiers are accidentally setting off Apple's new crash-detection technology without realizing, triggering emergency calls
- The rally in stocks will trick investors into thinking the bear market is over, but there's still a case for the S&P 500 to fall another 26% next year, Morgan Stanley's Mike Wilson says
- Adani may be the richest Indian but Ambani’s RIL retains the top spot on Hurun's list of most valuable companies
- BCCI picks 3-member Cricket Advisory Committee that will kickstart process to select men’s national team
- 38 years on, 1.2 lakh Bhopal residents carry gas tragedy scars, fight for justice
- Telegram wants to allow users to store and trade cryptocurrencies
- Rupee gains 18 paise to 81.08 against US dollar
- Indian markets open marginally lower amid weak global cues – PB Fintech, Maruti Suzuki, Tata Motors, M&M, Bajaj Auto and other stocks in focus
- Dharmaj Crop IPO
- Reliance Jio
- Whatsapp tips
- Air India crew guidelines
- Mukesh Ambani
- tata Consumer
- Highest Revenue companies
- New Cars in December 2022
- Best Companies for Work
- India's Richest People
- VerSe Innovation Company
- Top Valuable unlisted Company
- Tata Tiago cng vs Alto k10 cng
- Top 10 Colleges in India
- Top 10 Airlines in World