D.R. Horton Delivers Solid Q3 Results Amid Affordability Constraints
The nation's largest homebuilder, D.R. Horton, has reported a solid third quarter for fiscal 2026, driven by a focus on capital efficiency and delivering affordable homeownership opportunities to more Americans.
During the quarter, the company closed 23,983 homes, at the high end of its guidance range, and achieved a home sales gross margin of 20.7%. Consolidated pre-tax income totaled $1.2 billion, resulting in a pre-tax profit margin of 13.3%, while earnings per diluted share came in at $3.20, slightly below the prior year quarter's $3.36.
According to Paul Romanowski, President and CEO, the company remains focused on capital efficiency to generate strong operating cash flows and deliver compelling returns to its shareholders. Over the past 12 months, D.R. Horton has generated $3.4 billion of cash from operations, with all of it returned to shareholders through repurchases and dividends.
Notably, the company's return on assets ranks in the top 20% of all S&P 500 companies for the past three, five, and 10-year periods, demonstrating a disciplined, returns-focused operating model that delivers sustainable results. This was highlighted by Mike Murray, Chief Operating Officer, who noted that the company's operators will continue to adjust as market conditions evolve.
Another key highlight from the quarter was the company's commitment to affordability, with 65% of its mortgage company's closings being to first-time homebuyers. The average closing price for new homes came in at $362,000, which is below the national average by approximately $155,000 or 30%, reflecting D.R. Horton's continued focus on making homeownership more accessible.
Bill Wheat, Chief Financial Officer, added that net sales order value in the third quarter totaled $8.4 billion, with the cancellation rate for the quarter at 20%, within the company's normal historical range.
Overall, D.R. Horton's solid Q3 results demonstrate the company's ability to navigate a challenging market and deliver strong operating performance, positioning it well for continued value creation in the years to come."
