D.R. Horton, the nation's largest homebuilder by volume for the 25th consecutive year, reported $9.4 billion in consolidated revenue and $1 billion in pretax income for the fourth quarter of fiscal 2026. Full-year revenue reached $33 billion, with pretax income totaling $3.9 billion. However, higher mortgage rates, affordability constraints, and cautious consumer sentiment continued to pressure housing demand and profitability.
Fourth-quarter net sales orders declined 7% year over year to 18,619 homes, while order value decreased 9% to $6.6 billion. In response to softer demand, the company reduced home starts by 45% sequentially to better align construction with market conditions. Home sales gross margin fell to 19.5%, reflecting increased buyer incentives, pricing pressures, and higher litigation costs. D.R. Horton expects elevated incentives and continued margin pressure throughout fiscal 2027.
Its rental operations also faced headwinds, reporting a $25.3 million pretax loss in the fourth quarter, including $91.4 million in inventory impairment charges on completed multifamily projects. Higher interest rates contributed to lower expected sales values, particularly for multifamily developments. Meanwhile, the company is adjusting its single-family rental strategy by securing investors through forward-sale agreements before construction begins to improve capital efficiency and investment returns.
Looking ahead, D.R. Horton projects fiscal 2027 revenue of $30 billion to $32 billion and home closings between 79,000 and 84,000. To address affordability challenges, the company plans to expand its focus on smaller homes, smaller lots, and attached housing options, including duplexes and townhomes. Attached products now account for approximately 16% of its homebuilding mix, up from 10% a year earlier.
For the broader SFR, BTR, and multifamily housing sectors, D.R. Horton's results highlight how higher financing costs, affordability constraints, and shifting buyer demand are influencing development and investment strategies. Its focus on inventory management, attainable housing, and more disciplined development reflects the adjustments major homebuilders are making to navigate a more challenging housing market.
Source: Benzinga
