October 9, 2018 / 11:22 AM / 2 months ago

D.R. Horton sees 2018 homes sales below estimates

FILE PHOTO - A D.R. Horton home building project is pictured in San Marcos, California July 28, 2015. REUTERS/Mike Blake/File Photo

(Reuters) - U.S. homebuilder D.R. Horton Inc (DHI.N) on Tuesday forecast fiscal 2018 home sales and orders below Wall Street estimates, as rising home prices and mortgage rates hurt ordinary Americans’ ability to borrow.

While U.S. homebuilders have enjoyed robust demand, a short supply of homes and higher labor and raw material costs are forcing builders to raise prices of homes, making them less affordable at the same time as rises in Federal Reserve interest rates increase the cost of borrowing.

Mortgage rates are edging closer to the 5 percent threshold for the first time in years and the combination of these factors has raised concerns about a slowdown in the industry in 2019 as overall job growth is also expected to moderate.

Earlier this month, rival Lennar Corp (LEN.N) cut its fourth-quarter forecast for orders and deliveries, partly due to the sluggishness in the market.

Still, Horton, which should report fourth-quarter results next month, said it would sell 51,857 homes in fiscal 2018, an increase of 13 percent from a year earlier.

That compared to an estimate of 52,325 homes, according to a Refinitiv consensus of analysts’ estimates.

Orders, a key indicator of future revenue for homebuilders, are expected to rise 13 percent to 52,740 homes, the company said. Analysts had expected orders of 52,878 homes.

D.R. Horton’s shares fell about 1 percent to $40.25 in premarket trading.

Reporting by Arunima Banerjee and Ankit Ajmera in Bengaluru; Editing by Shailesh Kuber

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below