D.R. Horton cuts annual revenue forecast as incentives pressure margins
Elevated mortgage rates and persistent cost pressures are continuing to weigh on demand for new homes in the U.S. market. Against that backdrop, D.R. Horton trims its full-year revenue outlook and signals buyer incentives are likely to stay high through the fourth quarter.
Highlights
- D.R. Horton reduces its 2026 consolidated revenue forecast to $32.5 billion–$33.0 billion, below analysts’ $33.67 billion expectation and its earlier range.
- Company anticipates elevated sales incentives in Q4 2024, citing persistent affordability constraints and cautious homebuyer sentiment impacting demand and margins.
- D.R. Horton posts quarterly diluted EPS of $3.20, down from $3.36 a year ago, as ongoing cost inflation and incentives compress margins sector-wide.
Revised outlook amid weaker homebuyer demand
As reported by Reuters, D.R. Horton lowers its 2026 consolidated revenue forecast to between $32.5 billion and $33.0 billion, down from its earlier range of $33.5 billion to $34.5 billion. Analysts on average expect $33.67 billion, according to data compiled by LSEG.Executive Chairman David Auld says affordability constraints and cautious consumer sentiment continue to affect demand for new homes. He also says the company expects sales incentives to remain elevated during the fourth quarter, with the level of those incentives depending on demand, mortgage rates and other market conditions.
On a diluted basis, the Arlington, Texas-based builder earns $3.20 per share in the quarter ended June 30, compared with $3.36 per share a year earlier.
Cost inflation and incentives reshape sector conditions
U.S. homebuilders are navigating rising costs linked to persistent inflation, as well as tariffs imposed by President Donald Trump on key construction raw materials. Those pressures are adding to an already difficult environment for buyers dealing with high borrowing costs.Builders across the sector are using tools such as mortgage rate buydowns and smaller, more affordable homes to support demand. While those measures can help sales, they are also compressing margins as companies absorb more of the cost to close deals.
In our earlier article, we examined Donald Trump’s plan to reinstate 10% tariffs on a broad range of Chinese imports as temporary measures near expiration. We noted that economists warned the move could add to inflation pressure and disrupt supply chains, potentially pushing up costs for U.S. businesses and consumers.
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