Largest U.S. homebuilder sees orders fall 2 percent as housing demand slows
(Reuters) - D.R. Horton Inc, the largest U.S. homebuilder, reported a 2 percent fall in quarterly orders due to rising mortgage rates and policy uncertainty in Washington.
Mortgage rates began rising in May and touched a two-year high in July after the Federal Reserve started talking about easing the stimulus launched during the financial crisis.
Orders booked by homebuilders have been slowing this year, the second full year of the U.S. housing market recovery.
D.R. Horton's net orders fell to 5,160 homes in the fourth quarter ended September 30 from 5,276 a year earlier.
PulteGroup Inc, the second-largest U.S. builder, reported a 17 percent fall in quarterly orders last month.
Orders are a key indicator of the performance of builders as their revenue is recognized only after a house is handed over to the buyer.
D.R. Horton, faced with a shortage of developed land, is building fewer homes and raising prices. The company said on Tuesday that the value of its orders rose 14 percent to $1.43 billion in the latest quarter.
Net income jumped 39 percent to $139.5 million, or 40 cents per share, from $100.1 million, or 30 cents per share, a year earlier.
Homebuilding revenue rose 40 percent to $1.80 billion.
D.R. Horton shares closed at $18.06 on the New York Stock Exchange on Monday. They have dropped by about a third since interest rates started rising in May.
(Reporting by Sagarika Jaisinghani and Mridhula Raghavan in Bangalore; Editing by Kirti Pandey)