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Fort Worth-based D.R. Horton Inc., the nation’s largest home builder, reported disappointing results today, saying its orders for new homes had fallen 23% for the quarter ending Dec. 31, to 8,771 from 11,463 a year ago. The news follows a string of dismal result from builders including Lennar and Houvnanian. One glimmer of good news: the company said its cancellation rate had fallen to 33%, that’s an improvement from the 40% experienced in the previous quarter. That’s still twice the historical rate, however, an indication that many home buyers are still willing to walk away from their deposits than close on home they think will decline in price.
Majestic Research Corp., an independent research firm that gathers its own homebuilder sales data, found some surprising trends behind Horton’s sales. Majestic reports that some of Horton’s weakest markets were cities such as Chicago, Denver and Dallas that have largely escaped media attention regarding the housing bubble. By contrast, Horton’s sales were up in Washington, D.C. and Phoenix, two markets where home prices were widely reported to have gotten out of hand. The average sale price of a Horton home rose 7% year over year, according to Majestic, although it was flat from this quarter to the last.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.