The cautious consumer sentiment and affordability constraints weakening new-home demand continued into 2026 for D.R. Horton, contributing to declines in revenue and closings during the home builder’s fiscal first quarter.
The largest company on the 2025 Builder 100 list generated home building revenue of $6.5 billion on 17,818 closings in the first quarter, declines of 9% and 7% year-over-year, respectively.
“New home demand remains impacted by affordability constraints and cautious consumer sentiment,” president and CEO Paul Romanowski said during the company’s earnings call. “We increased our sales incentives during the first quarter and we expected incentives to remain elevated in fiscal 2026. The level will depend on demand, changes in mortgage interest rates, and overall market conditions.”
The builder’s cancellation rate remained flat at 18% in the quarter while net sales orders increased 3% to 18,300. For homes closed, the average closing price was $365,000, down 3% year-over-year. With affordability concerns top of mind for prospective buyers, D.R. Horton said its average sales price was 30% lower than the national average for new homes and $70,000 lower than the median price of homes on the resale market.
D.R. Horton ramped up its starts pace in the first quarter, ended Dec. 31, starting 18,500 homes, a 27% increase compared to the fourth quarter of 2025. Romanowski said the builder plans to further increase starts in the second quarter.
The builder ended the quarter with 30,400 homes in inventory, of which 20,000 were unsold. Of homes closed during the first quarter, 67% were on lots developed by third parties or Forestar, D.R. Horton’s residential lot development subsidiary.
“For homes we closed in the first quarter, our median cycle time decreased two weeks from a year ago,” Romanowski said. “Our improved cycle times enable us to hold fewer homes in inventory and turn our housing inventory more efficiently.”
In the first quarter, D.R. Horton generated a profit of $594.8 million, a decline of 30% compared to the same period a year ago. On a per share basis, profit declined 22% to $2.03. Despite the year-over-year decline, D.R. Horton beat consensus Wall Street projections for profit per share by approximately $0.05.
