HORTON D R INC DE
For the period ended Mar 31, 2025. Filed Apr 23, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 23, 2025
DHI$152.28-3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-12-31; filed 2025-01-23.
0000882184-25-000014
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-04-23.
0000882184-25-000024
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 247 previous paragraphs and 280 current paragraphs.
118 unchanged; 104 reworded; 52 added; 19 removed; 6 previous and 6 current paragraphs rearranged.
Tables are not compared: 22 previous and 22 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (52)
Current report
The 2025 spring selling season has begun, and new home demand has been slower than expected due to uncertainty among potential homebuyers caused by continued affordability constraints and declining consumer confidence. As a result, our net sales orders and homebuilding revenues in the second quarter decreased 15% from the prior year period, and our home sales gross margin decreased to 21.8% as we increased sales incentives such as buydowns of mortgage rates for our homebuyers. We strive to remain well-positioned with affordable product offerings and a flexible lot supply, and we will continue to manage our home pricing, sales incentives and number of homes in inventory based on the level of new home demand in each of our local markets. We expect our incentive levels to stay elevated and increase further, depending on market conditions and changes in mortgage interest rates.
Current report
•Consolidated revenues decreased 15% to $7.7 billion compared to $9.1 billion.
Current report
•Net income attributable to D.R. Horton decreased 31% to $810.4 million compared to $1.2 billion.
Current report
•Net sales orders decreased 15% to 22,437 homes, and the value of net sales orders decreased 17% to $8.4 billion.
Current report
•Home sales gross margin was 21.8% compared to 23.2%.
Current report
•Homebuilding pre-tax income decreased 31% to $935.0 million compared to $1.4 billion.
Current report
•Homebuilding pre-tax income was 13.0% of homebuilding revenues compared to 16.0%.
Current report
•Rental revenues were $236.6 million compared to $371.3 million.
Current report
•Rental pre-tax income was $22.8 million compared to $33.3 million.
Current report
•Forestar’s lots sold increased 4% to 3,411 compared to 3,289. Lots sold to D.R. Horton totaled 2,501 compared to 3,105.
Current report
•Forestar’s pre-tax income was $40.7 million compared to $58.9 million.
Current report
•Forestar’s pre-tax income was 11.6% of revenues compared to 17.6%.
Current report
•Financial services revenues decreased 6% to $212.9 million compared to $225.6 million.
Current report
•Financial services pre-tax income was $73.0 million compared to $78.0 million.
Current report
•Financial services pre-tax income was 34.3% of financial services revenues compared to 34.6%.
Current report
Consolidated Results:
Current report
•Consolidated revenues decreased 9% to $15.3 billion compared to $16.8 billion.
Current report
•Consolidated pre-tax income decreased 22% to $2.2 billion compared to $2.8 billion.
Current report
•Consolidated pre-tax income was 14.2% of consolidated revenues compared to 16.5%.
Current report
•Net income attributable to D.R. Horton decreased 22% to $1.7 billion compared to $2.1 billion.
Current report
•Net cash provided by operations was $210.5 million compared to net cash used in operations of $470.1 million.
Current report
Homebuilding:
Current report
•Homebuilding revenues decreased 9% to $14.4 billion compared to $15.8 billion.
Current report
•Homes closed decreased 8% to 38,335 homes, and the average closing price of those homes decreased 1% to $373,700.
Current report
•Net sales orders decreased 10% to 40,274 homes, and the value of net sales orders decreased 11% to $15.0 billion.
Current report
•Home sales gross margin was 22.3% compared to 23.1%.
Current report
•Homebuilding pre-tax income decreased 21% to $1.9 billion compared to $2.5 billion.
Current report
•Homebuilding pre-tax income was 13.6% of homebuilding revenues compared to 15.6%.
Current report
•Net cash provided by homebuilding operations was $876.0 million compared to $408.3 million.
Current report
Rental:
Current report
•Rental revenues were $454.3 million compared to $566.5 million.
Current report
•Rental pre-tax income was $34.7 million compared to $64.6 million.
Current report
•Single-family rental homes closed totaled 830 compared to 1,488.
Current report
•Multi-family rental units closed totaled 804 compared to 724.
Current report
Forestar:
Current report
•Forestar’s pre-tax income decreased 43% to $62.6 million compared to $110.1 million.
Current report
•Forestar’s pre-tax income was 10.4% of revenues compared to 17.2%.
Current report
Financial Services:
Current report
•Financial services pre-tax income decreased 16% to $121.6 million compared to $144.0 million.
Current report
•Financial services pre-tax income was 30.8% of financial services revenues compared to 34.4%.
Showing the first 40 of 52 passages. Open the source sections for the rest.
Removed paragraphs (19)
Previous report
Despite elevated mortgage interest rates and inflationary pressures, demand for new homes remained solid. Our net sales orders totaled 17,837 in the three months ended December 31, 2024 compared to 18,069 in the prior year period. Although the level of new and existing home inventories has increased from historically low levels, the supply of homes at affordable price points is still limited, and demographics supporting housing demand remain favorable. We believe we are well-positioned to meet changing market conditions with our affordable product offerings and lot supply and will manage our home pricing, sales incentives and number of homes in inventory based on the level of homebuyer demand. We expect our incentive levels to remain elevated, assuming similar market conditions and no significant changes in mortgage interest rates.
Previous report
•Consolidated revenues decreased 1% to $7.6 billion compared to $7.7 billion.
Previous report
•Net income attributable to D.R. Horton decreased 11% to $844.9 million compared to $947.4 million.
Previous report
•Net sales orders decreased 1% to 17,837 homes, and the value of net sales orders decreased 2% to $6.7 billion.
Previous report
•Home sales gross margin was 22.7% compared to 22.9%.
Previous report
•Homebuilding pre-tax income decreased 8% to $1.0 billion compared to $1.1 billion.
Previous report
•Homebuilding pre-tax income was 14.1% of homebuilding revenues compared to 15.0%.
Previous report
•Rental revenues were $217.8 million compared to $195.3 million.
Previous report
•Rental pre-tax income was $11.9 million compared to $31.3 million.
Previous report
•Forestar’s pre-tax income was $21.9 million compared to $51.2 million.
Previous report
•Forestar’s pre-tax income was 8.7% of revenues compared to 16.7%.
Previous report
•Financial services pre-tax income was 26.7% of financial services revenues compared to 34.3%.
Previous report
The number of net sales orders decreased 1% in the three months ended December 31, 2024 compared to the prior year period, and the value of net sales orders decreased 2% to $6.7 billion (17,837 homes) compared to $6.8 billion (18,069 homes). The average selling price of net sales orders during the three months ended December 31, 2024 was $373,000 down 1% from the prior year period.
Previous report
Despite elevated mortgage interest rates and inflationary pressures, demand for new homes remained solid during the first quarter with only a slight decrease in sales order volume compared to the prior year quarter. Although the level of new and existing home inventories has increased from historically low levels, the supply of homes at affordable price points is still limited, and demographics supporting housing demand remain favorable. We believe we are well-positioned to meet changing market conditions with our affordable product offerings and lot supply and will manage our home pricing, sales incentives and number of homes in inventory based on the level of homebuyer demand. We expect our incentive levels to remain elevated, assuming similar market conditions and no significant changes in mortgage interest rates.
Previous report
Employee compensation and related costs were $493.1 million and $487.3 million in the three months ended December 31, 2024 and 2023, respectively, representing 77% and 81% of SG&A costs in those periods. Our homebuilding operations employed 10,168 and 9,429 people at December 31, 2024 and 2023, respectively.
Previous report
Southwest Region — Homebuilding revenues increased 8% in the three months ended December 31, 2024 compared to the prior year period, primarily due to an increase in the number of homes closed, particularly in our Las Vegas market. The region generated pre-tax income of $168.4 million in the three months ended December 31, 2024 compared to $134.9 million in the prior year period. Home sales gross profit percentage increased by 210 basis points in the three months ended December 31, 2024 compared to the prior year period, primarily due to an increase in the average selling price of homes closed and a decrease in the average cost of those homes. As a percentage of homebuilding revenues, SG&A expenses were essentially flat in the three months ended December 31, 2024 compared to the prior year period.
Previous report
South Central Region — Homebuilding revenues decreased 11% in the three months ended December 31, 2024 compared to the prior year period, primarily due to a decrease in the number of homes closed, particularly in our Fort Worth and Austin markets. The region generated pre-tax income of $221.3 million in the three months ended December 31, 2024 compared to $271.6 million in the prior year period. Home sales gross profit percentage decreased by 50 basis points in the three months ended December 31, 2024 compared to the prior year period, primarily due to the average selling price of homes closed decreasing by more than the average cost of those homes. As a percentage of homebuilding revenues, SG&A expenses increased by 90 basis points in the three months ended December 31, 2024 compared to the prior year period, primarily due to the decrease in homebuilding revenues.
Previous report
North Region — Homebuilding revenues increased 29% in the three months ended December 31, 2024 compared to the prior year period, primarily due to an increase in the number of homes closed, particularly in our Chicago, suburban Washington, D.C. and Iowa markets. The region generated pre-tax income of $129.8 million in the three months ended December 31, 2024 compared to $86.1 million in the prior year period. Home sales gross profit percentage increased by 140 basis points in the three months ended December 31, 2024 compared to the prior year period, primarily due to the average selling price of homes closed increasing by more than the average cost of those homes. As a percentage of homebuilding revenues, SG&A expenses decreased by 70 basis points in the three months ended December 31, 2024 compared to the prior year period, primarily due to the increase in homebuilding revenues.
Previous report
Cash and Cash Equivalents — At December 31, 2024, cash and cash equivalents of our homebuilding segment totaled $2.5 billion.
Reworded paragraphs (104)
Previous wording
Our business operations consist of homebuilding, rental, a majority-owned residential lot development company, financial services and other activities. Our homebuilding operations are our core business and primarily include the construction and sale of single-family homes with sales prices generally ranging from $200,000 to more than $1,000,000, with an average closing price of $374,900 during the three months ended December 31, 2024. Approximately 84% of our home sales revenue in the three months ended December 31, 2024 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes, duplexes and triplexes.
Current wording
Our business operations consist of homebuilding, rental, a majority-owned residential lot development company, financial services and other activities. Our homebuilding operations are our core business and primarily include the construction and sale of single-family homes with sales prices generally ranging from $250,000 to more than $1,000,000, with an average closing price of $373,700 during the six months ended March 31, 2025. Approximately 84% of our home sales revenue in the six months ended March 31, 2025 was generated from the sale of single-family detached homes, with the remainder from the sale of attached homes, such as townhomes, duplexes and triplexes.
Previous wording
During the three months ended December 31, 2024, our number of homes closed and our home sales revenues decreased 1% and 2%, respectively, compared to the prior year period, and our consolidated revenues decreased 1% to $7.6 billion compared to $7.7 billion. Our pre-tax income was $1.1 billion in the three months ended December 31, 2024 compared to $1.2 billion in the prior year period, and our pre-tax operating margin was 14.6% compared to 16.1%. Net income was $851.9 million in the three months ended December 31, 2024 compared to $955.7 million in the prior year period, and our diluted earnings per share were $2.61 compared to $2.82.
Current wording
During the six months ended March 31, 2025, our number of homes closed and our home sales revenues decreased 8% and 9%, respectively, compared to the prior year period, and our consolidated revenues decreased 9% to $15.3 billion compared to $16.8 billion. Our pre-tax income was $2.2 billion in the six months ended March 31, 2025 compared to $2.8 billion in the prior year period, and our pre-tax operating margin was 14.2% compared to 16.5%. Net income was $1.7 billion in the six months ended March 31, 2025 compared to $2.1 billion in the prior year period, and our diluted earnings per share were $5.19 compared to $6.34.
Previous wording
In the trailing twelve months ended December 31, 2024, our return on equity (ROE) was 19.1% compared to 21.8% in the prior year period, and our return on assets (ROA) was 13.4% compared to 14.8%. ROE is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances for the trailing five quarters divided by five. ROA is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average consolidated assets, where average consolidated assets is the sum of total asset balances for the trailing five quarters divided by five.
Current wording
In the trailing twelve months ended March 31, 2025, our return on equity (ROE) was 17.4% compared to 22.2% in the prior year period, and our return on assets (ROA) was 12.2% compared to 15.1%. ROE is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average stockholders’ equity, where average stockholders’ equity is the sum of ending stockholders’ equity balances for the trailing five quarters divided by five. ROA is calculated as net income attributable to D.R. Horton for the trailing twelve months divided by average consolidated assets, where average consolidated assets is the sum of total asset balances for the trailing five quarters divided by five.
Previous wording
We remain focused on our relationships with land developers across the country in order to maximize returns and capital efficiency. Within our homebuilding land and lot portfolio, lots controlled through purchase contracts represent 76% of the lots owned and controlled at each of December 31, 2024, September 30, 2024 and December 31, 2023. We are prioritizing the purchase of finished lots from Forestar and other land developers when possible. During the three months ended December 31, 2024, 65% of the homes we closed were on lots developed by either Forestar or a third party.
Current wording
We remain focused on our relationships with land developers across the country in order to maximize returns and capital efficiency. Within our homebuilding land and lot portfolio, lots controlled through purchase contracts represent 75% of the lots owned and controlled at March 31, 2025 compared to 76% at September 30, 2024 and 77% at March 31, 2024. We are prioritizing the purchase of finished lots from Forestar and other land developers when possible. During the six months ended March 31, 2025, 65% of the homes we closed were on lots developed by either Forestar or a third party.
Previous wording
Our operating strategy focuses on consistently enhancing long-term value to our shareholders by leveraging our financial and competitive position to maximize the returns on our inventory investments and generate consistent, sustainable profitability and cash flows, while managing risk and maintaining financial flexibility to navigate changing economic conditions. Our strategy includes the following initiatives:
Current wording
Our operating strategy focuses on consistently enhancing long-term value to our shareholders by leveraging our financial and competitive positions to maximize the returns on our inventory investments and generate strong profits and cash flows from operations, while managing risk and maintaining financial flexibility to navigate changing economic conditions. Our strategy includes the following initiatives:
Previous wording
•Consolidated pre-tax income decreased 11% to $1.1 billion compared to $1.2 billion.
Current wording
•Consolidated pre-tax income decreased 30% to $1.1 billion compared to $1.5 billion.
Previous wording
•Consolidated pre-tax income was 14.6% of consolidated revenues compared to 16.1%.
Current wording
•Consolidated pre-tax income was 13.8% of consolidated revenues compared to 16.8%.
Previous wording
•Income tax expense was $258.0 million compared to $291.8 million, and our effective tax rate was 23.2% compared to 23.4%.
Current wording
•Income tax expense was $248.0 million compared to $344.8 million, and our effective tax rate was 23.2% compared to 22.6%.
Previous wording
•Diluted net income per common share attributable to D.R. Horton decreased 7% to $2.61 compared to $2.82.
Current wording
•Diluted net income per common share attributable to D.R. Horton decreased 27% to $2.58 compared to $3.52.
Previous wording
•Stockholders’ equity was $24.9 billion compared to $25.3 billion and $23.2 billion at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Stockholders’ equity was $24.3 billion compared to $25.3 billion and $23.8 billion at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Book value per common share increased to $78.53 compared to $78.12 and $69.70 at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Book value per common share increased to $78.82 compared to $78.12 and $72.13 at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Debt to total capital was 17.0% compared to 18.9% and 18.6% at September 30, 2024 and December 31, 2023, respectively. Net debt to total capital was 7.6% compared to 5.2% and 7.8% at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Debt to total capital was 21.1% compared to 18.9% and 20.0% at September 30, 2024 and March 31, 2024, respectively. Net debt to total capital was 14.3% compared to 5.2% and 10.8% at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Homebuilding revenues decreased 2% to $7.2 billion compared to $7.3 billion.
Current wording
•Homebuilding revenues decreased 15% to $7.2 billion compared to $8.5 billion.
Previous wording
•Homes closed decreased 1% to 19,059 homes, and the average closing price of those homes decreased slightly to $374,900.
Current wording
•Homes closed decreased 15% to 19,276 homes, and the average closing price of those homes decreased 1% to $372,500.
Previous wording
•Sales order backlog decreased 21% to 11,003 homes, and the value of sales order backlog also decreased 21% to $4.3 billion.
Current wording
•Sales order backlog decreased 21% to 14,164 homes, and the value of sales order backlog decreased 22% to $5.5 billion.
Previous wording
•Homebuilding SG&A expense was 8.9% of homebuilding revenues compared to 8.3%.
Current wording
•Homebuilding SG&A expense was 8.9% of homebuilding revenues compared to 7.2%.
Previous wording
•Homebuilding pre-tax return on inventory was 26.7% compared to 29.0%.
Current wording
•Homebuilding pre-tax return on inventory was 24.3% compared to 29.9%.
Previous wording
•Homebuilding cash and cash equivalents totaled $2.5 billion compared to $3.6 billion and $2.5 billion at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Homebuilding cash and cash equivalents totaled $1.9 billion compared to $3.6 billion and $2.2 billion at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Homebuilding inventories totaled $20.7 billion compared to $20.0 billion and $19.4 billion at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Homebuilding inventories totaled $20.9 billion compared to $20.0 billion and $19.9 billion at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Homes in inventory totaled 36,200 compared to 37,400 and 42,600 at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Homes in inventory totaled 36,900 compared to 37,400 and 45,000 at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Owned lots totaled 154,400 compared to 152,500 and 145,000 at September 30, 2024 and December 31, 2023, respectively. Lots controlled through purchase contracts totaled 485,400 compared to 480,400 and 462,200 at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Owned lots totaled 150,600 compared to 152,500 and 143,900 at September 30, 2024 and March 31, 2024, respectively. Lots controlled through purchase contracts totaled 462,500 compared to 480,400 and 473,300 at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Homebuilding debt was $2.4 billion compared to $2.9 billion and $2.4 billion at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Homebuilding debt was $3.1 billion compared to $2.9 billion and $2.4 billion at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Rental inventory totaled $3.0 billion compared to $2.9 billion and $3.0 billion at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Rental inventory totaled $3.1 billion compared to $2.9 billion and $3.1 billion at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Single-family rental homes closed totaled 311 compared to 379.
Current wording
•Single-family rental homes closed totaled 519 compared to 1,109.
Previous wording
•Multi-family rental units closed totaled 504 compared to 300.
Current wording
•Multi-family rental units closed totaled 300 compared to 424.
Previous wording
•Forestar’s revenues decreased 18% to $250.4 million compared to $305.9 million. Revenues in the current and prior year quarters included $218.6 million and $273.5 million, respectively, of revenue from land and lot sales to our homebuilding segment.
Current wording
•Forestar’s revenues increased 5% to $351.0 million compared to $333.8 million. Revenues in the current and prior year quarters included $267.8 million and $310.3 million, respectively, of revenue from land and lot sales to our homebuilding segment.
Previous wording
•Forestar’s cash and cash equivalents totaled $132.0 million compared to $481.2 million and $458.9 million at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Forestar’s cash and cash equivalents totaled $174.3 million compared to $481.2 million and $416.2 million at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Forestar’s inventories totaled $2.7 billion compared to $2.3 billion and $2.0 billion at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Forestar’s inventories totaled $2.8 billion compared to $2.3 billion and $2.1 billion at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Forestar’s owned and controlled lots totaled 106,000 compared to 95,100 and 82,400 at September 30, 2024 and December 31, 2023, respectively. Of these lots, 43,800 were under contract to sell to or subject to a right of first offer with D.R. Horton compared to 37,700 and 33,700 at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Forestar’s owned and controlled lots totaled 105,900 compared to 95,100 and 96,100 at September 30, 2024 and March 31, 2024, respectively. Of these lots, 43,900 were under contract to sell to or subject to a right of first offer with D.R. Horton compared to 37,700 and 34,300 at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Forestar’s debt was $806.8 million compared to $706.4 million and $705.3 million at September 30, 2024 and December 31, 2023, respectively.
Current wording
•Forestar’s debt was $872.5 million compared to $706.4 million and $705.7 million at September 30, 2024 and March 31, 2024, respectively.
Previous wording
•Forestar’s lots sold decreased 26% to 2,333 compared to 3,150. Lots sold to D.R. Horton totaled 2,112 compared to 2,834.
Current wording
•Forestar’s lots sold decreased 11% to 5,744 compared to 6,439. Lots sold to D.R. Horton totaled 4,613 compared to 5,939.
Previous wording
•Financial services revenues decreased 5% to $182.3 million compared to $192.6 million.
Current wording
•Financial services revenues decreased 5% to $395.2 million compared to $418.2 million.
Previous wording
The following tables and related discussion set forth key operating and financial data for our homebuilding operations by reporting segment as of and for the three months ended December 31, 2024 and 2023.
Current wording
The following tables and related discussion set forth key operating and financial data for our homebuilding operations by reporting segment as of and for the three and six months ended March 31, 2025 and 2024.
Previous wording
Revenues from home sales were $7.1 billion (19,059 homes closed) for the three months ended December 31, 2024 compared to $7.3 billion (19,340 homes closed) in the prior year period. The decrease in revenues was attributable to a slight decrease in both the number of homes closed and in the average selling price of those homes.
Current wording
Revenues from home sales were $7.2 billion (19,276 homes closed) and $14.3 billion (38,335 homes closed) for the three and six months ended March 31, 2025, respectively, compared to $8.5 billion (22,548 homes closed) and $15.7 billion (41,888 homes closed) in the prior year periods. The decrease in revenues in both periods was primarily attributable to a decrease in the number of homes closed, along with a 1% decrease in the average selling price.
Previous wording
The markets contributing most to the decrease in sales order volume were the Salt Lake City market in the Northwest, the Dallas and Fort Worth markets in the South Central and the Florida markets in the Southeast. The markets with the largest increases in sales order volume were the North Carolina markets in the East and the suburban Washington, D.C., New Jersey and Chicago markets in the North.
Current wording
The number of homes closed decreased 15% and 8% in the three and six months ended March 31, 2025, respectively, compared to the prior year periods. The markets contributing most to the decrease in home closings volume in both periods were the Salt Lake City market in the Northwest, the Phoenix and California markets in the Southwest, most of the Texas markets in the South Central and the Florida markets in the Southeast. The markets contributing most to the increase in closings volume in the North were the suburban Washington, D.C., New Jersey and Chicago markets.
Previous wording
Gross profit from home sales decreased to $1.6 billion in the three months ended December 31, 2024 from $1.7 billion in the prior year period and decreased 20 basis points to 22.7% as a percentage of home sales revenues. The percentage decrease resulted from a decrease of 30 basis points due to the average cost of our homes closed increasing along with a slight decrease in the average selling price of those homes, partially offset by an increase of 10 basis points due to a decrease in warranty and construction defect costs.
Current wording
Gross profit from home sales decreased to $3.2 billion in the six months ended March 31, 2025 from $3.6 billion in the prior year period and decreased 80 basis points to 22.3% as a percentage of home sales revenues. The percentage decrease resulted from a decrease of 80 basis points due to the average cost of our homes closed increasing along with a slight decrease in the average selling price of those homes.
Previous wording
We remain focused on managing the pricing, incentives and sales pace in each of our communities to optimize the returns on our inventory investments and adjust to local market conditions and new home demand. To adjust to changes in market conditions during recent years, we have used a higher level of incentives and reduced home prices and sizes of our home offerings where necessary to provide better affordability to homebuyers. We expect our incentive levels to remain elevated, assuming similar market conditions and no significant changes in mortgage interest rates.
Current wording
We remain focused on managing the pricing, incentives and sales pace in each of our communities to optimize the returns on our inventory investments and adjust to local market conditions and new home demand. To adjust to changes in market conditions during recent years, we have used a higher level of incentives and reduced home prices and sizes of our home offerings where necessary to provide better affordability to homebuyers. We expect our incentive levels to stay elevated and increase further, depending on market conditions and changes in mortgage interest rates.
Previous wording
Land/lot sales and other revenues from our homebuilding operations were $21.2 million and $20.3 million in the three months ended December 31, 2024 and 2023, respectively. We continually evaluate our land and lot supply, and fluctuations in revenues and profitability from land sales occur based on how we manage our inventory levels in various markets. We generally purchase land and lots with the intent to build and sell homes on them. However, some of the land that we purchase includes commercially zoned parcels that we may sell to commercial developers. We may also sell residential lots or land parcels to manage our supply or for other strategic reasons. As of December 31, 2024, our homebuilding operations had $8.7 million of land held for sale that we expect to sell in the next twelve months.
Current wording
We continually evaluate our land and lot supply, and fluctuations in revenues and profitability from land sales occur based on how we manage our inventory levels in various markets. We generally purchase land and lots with the intent to build and sell homes on them. However, some of the land that we purchase includes commercially zoned parcels that we may sell to commercial developers. We may also sell residential lots or land parcels to manage our supply or for other strategic reasons. As of March 31, 2025, our homebuilding operations had $11.9 million of land held for sale that we expect to sell in the next twelve months.
Previous wording
At the end of each quarter, we review the performance and outlook for all of our communities and land inventories for indicators of potential impairment and perform detailed impairment evaluations and analyses when necessary. As a result of this review, there were $2.0 million of impairment charges recorded in our homebuilding segment during the three months ended December 31, 2024 compared to none in the prior year quarter.
Current wording
At the end of each quarter, we review the performance and outlook for all of our communities and land inventories for indicators of potential impairment and perform detailed impairment evaluations and analyses when necessary. As a result of this review, there were $5.4 million and $7.4 million of impairment charges recorded in our homebuilding segment during the three and six months ended March 31, 2025, respectively, compared to $5.6 million in the three and six months ended March 31, 2024.
Previous wording
During the three months ended December 31, 2024, earnest money and pre-acquisition cost write-offs related to our homebuilding segment’s land purchase contracts that we have terminated or expect to terminate were $9.8 million compared to $5.5 million in the same period of fiscal 2024.
Current wording
During the three and six months ended March 31, 2025, earnest money and pre-acquisition cost write-offs related to our homebuilding segment’s land purchase contracts that we have terminated or expect to terminate were $24.0 million and $33.9 million, respectively, compared to $7.5 million and $13.0 million in the prior year periods.
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Current report — wording carried from elsewhere
Key financial results for the six months ended March 31, 2025, as compared to the same period of 2024, were as follows:
Current report — wording carried from elsewhere
•Income tax expense was $506.0 million compared to $636.6 million, and our effective tax rate was 23.2% compared to 22.9%.
Current report — wording carried from elsewhere
•Diluted net income per common share attributable to D.R. Horton decreased 18% to $5.19 compared to $6.34.
Current report — wording carried from elsewhere
•Homebuilding SG&A expense was 8.9% of homebuilding revenues compared to 7.7%.
Current report — wording carried from elsewhere
•Forestar’s revenues decreased 6% to $601.3 million compared to $639.7 million. Revenues in the current and prior year periods included $486.4 million and $583.9 million, respectively, of revenue from land and lot sales to our homebuilding segment.
Current report — wording carried from elsewhere
The decline in Forestar’s pre-tax income was primarily due to lower gross margins on lot sales and higher SG&A costs.
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Previous report — wording carried elsewhere
•Financial services pre-tax income was $48.6 million compared to $66.0 million.
Previous report — wording carried elsewhere
The markets contributing most to the 22% increase in closings volume in the North were the Chicago, suburban Washington, D.C. and Iowa markets.
Previous report — wording carried elsewhere
The decline in Forestar’s pre-tax income was primarily due to a 26% decrease in the number of lots sold.
Previous report — wording carried elsewhere
The indenture governing our senior notes imposes restrictions on the creation of secured debt and liens. At December 31, 2024, we were in compliance with all of the limitations and restrictions associated with our public debt obligations.
Previous report — wording carried elsewhere
At December 31, 2024, Forestar was in compliance with all of the covenants, limitations and restrictions of its revolving credit facility and senior note obligations.
Previous report — wording carried elsewhere
These mortgage repurchase facilities are not guaranteed by D.R. Horton, Inc. or any of the subsidiaries that guarantee the debt of our homebuilding, rental or Forestar operations.