America's Largest Homebuilder Says Buyers Are Still Hesitating

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Horton Inc. (NYSE: DHI ) reported fiscal third-quarter 2026 results on Tuesday that topped Wall Street earnings expectations, but the homebuilder lowered its full-year sales and home-closing guidance as affordability pressures and cautious consumer sentiment continued to weigh on demand.

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Horton is America’s largest homebuilder by volume, alongside other major industry leaders such as Lennar Corporation (NYSE: LEN ) and PulteGroup Inc. (NYSE: PHM ).

Net income attributable to the company declined 12% year over year to $904.9 million.

Earnings came in at $3.20 per share, beating the analyst consensus estimate of $3.06.

Revenue increased to $9.23 billion from a year earlier, exceeding analysts’ expectations of $9.18 billion.

Consolidated pretax income totaled $1.2 billion, with a pretax profit margin of 13.3%.

Executive Chairman David Auld said affordability challenges and cautious consumer sentiment continue to pressure new-home demand.

He added that elevated sales incentives are expected to continue through the fourth quarter, with incentive levels depending on demand trends, mortgage rates and broader market conditions.

Homebuilding Margins Narrow Homebuilding revenue rose 1% from a year earlier to $8.7 billion as home closings increased 4% to 23,983 units.

Pretax income from the homebuilding segment fell 10% to $1.1 billion, while the pretax margin narrowed to 12.3%.

Net sales orders were flat year over year at 23,084 homes valued at $8.4 billion.

The cancellation rate increased to 20% from 17% in the prior-year quarter.

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Horton had 38,000 homes in inventory, including 23,300 unsold homes.

Of those, 7,600 were completed, including 600 that had been completed for more than six months.

Rental, Forestar And Financial Services Add Profit The rental segment generated $266.1 million in revenue from the sale of 601 single-family rental homes and 339 multifamily units.

Pretax income totaled $31.0 million, resulting in an 11.6% margin.

Forestar sold 3,659 lots during the quarter and generated $407.0 million in revenue and $48.7 million in pretax income, representing a 12.0% margin.

Financial services reported revenue of $220.7 million and pretax income of $70.3 million, producing a 31.9% margin.

Operating cash flow totaled $880.8 million for the first nine months of fiscal 2026.

Total liquidity stood at $6.1 billion, including $2.08 billion in cash and cash equivalents.

During the quarter, the company repurchased 4.2 million shares for $615.7 million, bringing year-to-date buybacks to 14.6 million shares.

It had $1.1 billion remaining under its share repurchase authorization and declared a quarterly dividend of 45 cents per share, payable Aug.

13 to shareholders of record as of Aug.

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Outlook Cut D.R.

Horton lowered its fiscal 2026 revenue outlook to $32.5 billion to $33.0 billion from its prior forecast of $33.5 billion to $34.5 billion.

The new range is below the analyst consensus estimate of $33.66 billion.

The company also reduced its homebuilding closing forecast to 83,800 to 84,300 homes from its previous guidance of 86,000 to 87,500 homes.

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Horton reaffirmed expectations for operating cash flow of at least $3.0 billion, approximately $2.5 billion in share repurchases and about $500 million in dividend payments for fiscal 2026.

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Horton Price Action DHI Price Action: D.R.

Horton shares were down 0.48% at $144.10 during premarket trading on Tuesday, according to Pro data.