D.R. Horton, considered the nation’s second-largest home builder, today announced that sales orders decreased 40.2 percent in the third quarter, citing an inventory glut and increased foreclosures.
For the quarter ended June 30, the Fort Worth, Texas-based company sold 8,559 homes, down from 14,316 homes during the same quarter in 2006. The company also said that the average price per unit dropped 12 percent to $233,672, down from $265,437 a year ago. Orders declined in every region, with the worst declines coming in California and the northeast.
Meanwhile the cancellation rate -- or orders canceled divided by gross sales orders -- reached 38 percent, which is high by industry standards. With these results, D.R. Horton is set to record a major third-quarter loss later this month. Further, the company doesn’t expect the housing market to rebound in the near future.
“We expect the housing environment to remain challenging,” Chairman Donald Horton said in a statement. As of 11:19 a.m., D.R. Horton shares had fallen 2.9 percent, to $19.21, a three-year
In the previous quarter, D.R. Horton reported that sales orders plunged 36.7 percent.