Analyst Note| Brian Bernard, CFA, CPA |
Even America's largest builder (by volume), D.R. Horton, has not been immune to the stresses of unrelenting strong demand coupled with supply chain issues that have lengthened the time it takes to build homes. Horton has responded by aggressively raising prices, which has slowed its new order pace to better match its current production capacity. As a result, the average selling price of new orders during Horton's fiscal third quarter increased a stunning 22% year over year to $359,200 and new orders declined 17% to 17,952. While this is a big increase in price, D.R. Horton's more affordable product and geographic mix compared with other builders has kept its ASP competitive with the national existing home sales market. Indeed, the average sales price for existing homes in June was $381,800.