(Reuters) -U.S. homebuilder D.R. Horton Inc reported fourth-quarter results above Wall Street estimates on Tuesday, benefiting from elevated property prices as inventory of previously possessed homes remained at historic lows.
Supply in the housing market remains tight as a majority of homeowners locked in a fixed rate below 5% are refraining from selling and upgrading to a new house at the current mortgage rate that's hovering at a two-decade high.
The "rate-lock in" effect has been a tailwind for homebuilders this year, even as rising home prices constrain affordability for many buyers.
The company expects homes closed in fiscal 2024 to be in the range of 86,000 homes to 89,000 homes, higher than 82,917 homes it sold in the current fiscal year.
Arlington, Texas based D.R. Horton expects 2024 revenue in the range of $36.0 billion to $37.0 billion, largely in line with analysts' estimates of $36.53 billion, according LSEG data.
With current 30-year fixed mortgage rates nearing 8% and home prices continuing to surge, homebuilders have been increasing incentives such as mortgage rate buydowns, especially for entry-level buyers, and reducing the size of new homes to offer lower price points.
Net income attributable to D.R. Horton for the fourth quarter ended September fell 4.71% to $4.45 per share from a year earlier, but beat analysts' average estimate of $3.93, as home sales remained high due to a supply shortage.
Revenue jumped 8.96% to $10.50 billion in the quarter, also above analysts' average estimate of $10.01 billion.
(Reporting by Ananta Agarwal in Bengaluru; Editing by Shinjini Ganguli)
